Luxury isn’t about the money.
That’s the counterintuitive message of Alexandre Arnault, the 27-year-old son of LVMH Moët Hennessy Louis Vuitton chairman and France’s wealthiest man Bernard Arnault. The younger Arnault is anchoring his place in the family business as chief executive officer of German luggage company Rimowa, a role he’s held since LVMH acquired the brand in 2016.
The Arnault family wealth — recently estimated at $100.4 billion by Forbes’ Real-time Billionaires List — is rivaled only by Amazon founder Jeff Bezos’ $121.3 billion stockpile and Microsoft co-founder Bill Gate’s $109.8 billion kitty. But the younger Arnault told the lunch crowd at Goldman Sachs recently that “luxury” evokes connotations of extravagance and spending that detract from its real appeal — quality, at arguably any price.
Josh Murray, managing director of Goldman Sachs’ structured equity group, interviewed Arnault recently at a ‘Talks at GS’ lunchtime event in New York and pressed him on his reluctance to use the term “luxury.”
“In our financial communication we call ourselves the world leader in luxury goods,” Arnault said. “I don’t like to use it because I think it’s too linked to price. And I don’t think our industry has anything to do with price.
“When you think luxury, you think, stores where you’re going to have things you can’t afford, and you’re going to be scared to go inside and everything, and, to me, when you buy a Vuitton bag for $4,000, it’s a lot of money, it’s a luxury product. When you buy a bottle of Moet champagne for $40, it’s a luxury product — a lot of people can afford this, or Dior mascara for $25,” he said, referring to some of the more affordable offerings of LVMH brands Moët & Chandon and Christian Dior.
“Why? Because, those products, whether it’s a $40 bottle of champagne, the $1,000 Rimowa suitcase, or the million-dollar Tiffany necklace or whatever, are made with the same level of craftsmanship, of quality, of all the things that make those products desirable. And I don’t think price should really come into the equation,” he said.
That was a reference to jeweler Tiffany & Co., which LVMH agreed to purchase in November for $16.2 billion. That counts as the largest luxury deal in the elder Arnault’s long career and one that Goldman played a role in, representing Tiffany after LVMH came calling.
During the talk, Arnault made his case for Rimowa as an emblem of that vision.
In the past three years, Rimowa has distanced itself from wholesale accounts, and embraced collaborations with on-trend names including streetwear brand Supreme and Off-White’s Virgil Abloh, who imprinted the ridged surfaces of Rimowa cases with such arch commentary as “Personal” and “Belongings” in large bold type.
The company has also sought to branch out from suitcases as it tries to become a larger presence in its customer’s travel ensemble. To that end, Rimowa has introduced travel products including iPhone covers as well as personal belongings cases in collaboration with LVMH-brand Dior and retailing at $2,440 on the Dior and Rimowa web sites.
The calculus seems to be working. At the time LVMH bought the 120-year-old family owned German brand, it was pulling in some 440 million euros in sales. Sales exceeded that level last year, Arnault said.
“Little by little, you’ll see us kind of come out with new products in the travel sphere that are both, true to our brand, and true to our promise of functional desirability,” said Arnault.