From: lessgovt@gmail.com   
      
   World’s Richest Man Likes the View Atop Refurbished Tiffany   
   By Nick Kostov and Suzanne Kapner, April 28, 2023, WSJ   
   As a young tycoon living in New York in the 80s, Bernard Arnault quickly   
   realized some of the most valuable real estate was located on the corner of   
   Fifth Avenue and 57th Street. When he bought the building that houses the   
   Louis Vuitton flagship store on    
   the northeast corner, he got a close-up view of Tiffany & Co. across the   
   street to the south.   
      
   “We said, maybe at one point we’ll have more than one corner,” Arnault   
   said in a rare interview from the glass-enclosed top floor of Tiffany’s   
   newly renovated store, where he could gaze out and survey his domain. He now   
   has three.   
      
   Arnault, CEO, chairman and controlling shareholder of LVMH Moët Hennessy   
   Louis Vuitton SE, has literally and figuratively cornered the luxury-goods   
   industry. With the acquisition of Bulgari in 2011, followed a decade later by   
   Tiffany, the only corner of    
   the gilded intersection he doesn’t control is owned by department store   
   Bergdorf Goodman.   
      
   Since his acquisition of Dior in 1984, Arnault has built LVMH, now valued at   
   around $500 billion, through a series of high-stakes corporate takeovers while   
   also cultivating fashion designers. Rivals call him the “wolf in cashmere.”   
      
   Demand for the company’s dozens of brands, including jewelry, fine wine,   
   fashion labels and upscale hotels, helped LVMH emerge from the pandemic as the   
   most valuable listed company in Europe. It also helped Arnault surpass Elon   
   Musk as the world’s    
   richest person.   
      
   Arnault, 74, has had his doubters along the way. A little over two years ago,   
   he tried to back out of the Tiffany deal after the Covid-19 pandemic threw the   
   luxury industry into turmoil. After Tiffany sued, he went ahead with the   
   purchase at a slightly    
   reduced price. Some observers at the time thought he overpaid.    
      
   Now it is the opposite, said Arnault, who was clad in a Celine pinstripe suit,   
   Christian Dior tie and Loro Piana loafers—all brands he owns. On his wrist   
   was a Patek Philippe Nautilus watch with a Tiffany-blue face. “People say,   
   ‘Oh, you may have    
   underpaid, you may have done a very good deal.’”    
      
   Arnault said Tiffany was a dormant brand before the acquisition, with sales   
   plateauing as overall jewelry sales were growing. “We bought it after a good   
   five-year sleep,” Arnault said. “It was good timing.”   
      
   Jewelry sales soared during the pandemic as people stuck at home treated   
   themselves to luxuries in lieu of traveling, dining out and other experiences.   
   Under LVMH, Tiffany participated in that boom. Tiffany no longer discloses   
   financial details, but    
   Arnault said the jeweler’s profits doubled in the past two years.    
      
   Tiffany had sales of 5.12 billion euros in 2022, or about $5.65 billion,   
   according to estimates from Erwan Rambourg, the global head of consumer and   
   retail research at HSBC. In 2019, the last full year before it was acquired,   
   Tiffany reported $4.4    
   billion in sales.    
      
   Since taking over, LVMH has put in place a new management team of roughly a   
   dozen people, the majority of which came from other luxury brands, including   
   several from LVMH businesses. Arnault’s son Alexandre Arnault was installed   
   as executive vice    
   president of product and communications. He is one of Arnault’s 5 kids who   
   the luxury magnate is preparing to one day succeed him.   
      
   Under Alexandre’s direction, the company embarked on a marketing blitz   
   designed to raise Tiffany’s profile and appeal to a younger audience. A 2021   
   ad campaign featured married musicians Jay-Z and Beyoncé, who crooned “Moon   
   River,” the theme    
   song of the 1961 movie “Breakfast at Tiffany’s” that starred Audrey   
   Hepburn.    
      
   Tiffany has also elevated the brand by lifting its entry price for jewelry,   
   and rolled out new collections such as Lock, which is mined from the Tiffany   
   archives and makes use of a swivel mechanism that echoes the functionality of   
   a padlock.   
      
   At the same time, it has boosted so-called high jewelry, which typically   
   starts at around $100,000. Arnault said the proportion of high-end jewelry   
   sold by Tiffany was declining before he bought the company.    
      
   Being part of LVMH has given Tiffany financial advantages as well as extra   
   clout in negotiating better retail placement. “The success of a mall is very   
   often due to our presence,” Arnault said. “And we already have several   
   examples of very nice    
   shops we were able to secure for Tiffany.”   
      
   LVMH spent hundreds of millions of dollars to renovate the flagship store,   
   which accounted for about 10% of the brand’s global sales before it closed   
   for renovations in 2019. Some analysts estimate the cost was around $500   
   million.   
      
   When asked to confirm that number, Arnault said: “You cannot dream when you   
   talk numbers.” Instead of thinking about profitability, Mr. Arnault urges   
   his executives to think about desirability. “When you create desire, profits   
   are a consequence,”    
   he said.     
      
   Mr. Arnault said he sees opportunities for Tiffany to expand in Europe and   
   China. As other Western companies have looked at scaling back investments in   
   China amid geopolitical uncertainties, Arnault is moving ahead. He met last   
   week with China’s    
   commerce minister and discussed the potential for Chinese consumers to start   
   traveling abroad again.    
      
   “Many in the U.S. are still buying a lot of Chinese products and vice   
   versa,” Arnault said. “I don’t think that either for the Chinese economy   
   or for the U.S. economy, it would be good to stop that.”   
      
   As he was negotiating to buy Tiffany, Arnault visited the flagship store and   
   received a guided tour by a senior Tiffany executive. “We got lost in the   
   building,” Arnault said. “Here is a guy getting lost in his own shop. I   
   said, ‘We have some    
   work to do on this.’”   
      
   He wasn’t happy with the renovation plans proposed by previous management   
   that reflected the traditional dark wooden interior of the original, which   
   opened in 1940. “We decided to stop this and do something else, which is   
   more in line with the beauty    
   and the myth which is Tiffany,” he said. “Tiffany is, I think, the most   
   recognizable and the most mythical U.S. brand in the world.”   
      
      
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