ARNAULT FINALLY REPAYS UNFAIR FUNDS
PARIS — In a victory for the European Union’s policy on free competition, Bernard Arnault has reimbursed the French government $69 million (356 million francs) for funds provided one of his earliest acquisitions.
LVMH Moet Hennessy Louis Vuitton, the luxury conglomerate of which Arnault is president, handed over the money last week to France’s Treasury Ministry, a spokeswoman for the firm confirmed. The funds date back to the 1984 acquisition by Arnault of Boussac Saint Freres, which he bought for one symbolic franc after the troubled company went into receivership. Arnault subsequently sold off Boussac’s industrial activities, but kept its Bon Marché Left Bank department store in Paris and the Christian Dior fashion house.
Between 1982 and 1985, Boussac received around $194 million (1 billion francs) in state assistance. In 1987, however, the European Commission decreed that the assistance contravened its rules on free competition. Two years later, the European Court of Justice in Luxembourg ordered the French government to collect $65.6 million (338.5 million francs) in damages from Boussac. Arnault fought the decision in French and other European courts for seven years.
“We’ll never pay a sou in this matter,” he said in 1988. But last fall, LVMH announced that it had made a provision in its balance sheet to cover an eventual payment. The sum eventually paid also included legal costs.