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The Legend of Luxury, Wines & Spirits, Jewelry and high fashion.
Bernard Arnault's LVMH group owns a portfolio of prestigious luxury brands, including Louis Vuitton, Christian Dior, Fendi, Givenchy, and Celine in the fashion sector. In the realm of wines and spirits, LVMH owns Moët & Chandon, Dom Pérignon, and Hennessy. Additionally, the company holds stakes in the jewelry brand Bulgari and the luxury watchmaker TAG Heuer. These brands showcase a blend of high fashion, fine spirits, and luxury goods, all contributing to Arnault's position as a leader in the luxury industry.
Keytakeaways:
Luxury is about high quality, creativity, and innovation.
Mindset ⭐⭐⭐
- Always anticipate the worst and consider what could go wrong.
- Never be satisfied; always ask if you’ve done enough.
- Be positive and continue innovating.
- Arnault is long-term optimistic but short-term pessimistic.
- He looks for undervalued stocks during crises and acquires them.
During Business
- He bought Christian Dior because it was a well-known brand, recognized everywhere.
- Luxury products are timeless, while innovation-driven products (like Apple) require constant updates.
- They constantly ask, “How can we create the most innovative products?”
- If you create something unique, you have a market.
- Arnault met Steve Jobs when Jobs asked for advice on pricing iPods.
Market Considerations
- Key players in the luxury market are engineers from the U.S. and China.
Marketing
- Positioning a product involves analyzing customer wants and following trends.
- They often do the opposite of market trends, creating new products that might fail, but, when successful, customers follow. This is the agile Venture Capital mindset which bets one-two out of 20 that acchieves a strong return.
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- For luxury, creating desire is key, with promotions in magazines or online.
Internet
- The internet is increasingly important.
- Magazine marketing is decreasing while internet marketing is rising.
- They target competitors on platforms like Facebook because of their strong brands and potential to compete in ads marketing.
Customers
- Customers use computers and mobile devices to check products.
- The internet influences their choices by telling the brand’s story.
Investment Vision ⭐⭐
- Arnault maintains a 20-year vision: 80% good years, 20% bad (10% bad, 10% very bad).
- In crises, they find opportunities but stay patient.
- He advises against investing when things are overpriced and emphasizes patience during market downturns to avoid selling unnecessarily.