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#355 Rare Bernard Arnault Interview
July 4th, 2024 | E355

What I learned from reading The House of Arnault by Brad Stone and Angelina Rascouet. 

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(3:00) While other politicians were content to get their information from a scattering of newspapers, he devoured whole shelves.  — Young Titan: The Making of Winston Churchill by Michael Shelden. (Founders #320)

(7:00) Arnault had understood before anyone else that it was a true industry. — The Taste of Luxury: Bernard Arnault and the Moet-Hennessy Louis Vuitton Story by Nadege Forestier and Nazanine Ravai. (Founders #296)

(9:00) Arnault is an iron fist in an iron glove. — The Taste of Luxury: Bernard Arnault and the Moet-Hennessy Louis Vuitton Story by Nadege Forestier and Nazanine Ravai.

The public conception of Sam as a good ol’ country boy wearing a soft velvet glove misses the fact that there’s an iron fist within. —  Sam Walton: The Inside Story of America's Richest Man by Vance Trimble.

(12:00) People often ask me, “When are you going to retire?” And I answer, “Retire from what?” I’ve never worked a day in my life. Everything I’ve done has been because I’ve loved doing it, because it was enthralling. — Am I Being Too Subtle?: Straight Talk From a Business Rebel by Sam Zell. (Founders #269)

(16:00) “I am not interested in managing a clothing factory. What you need, and I would like to run, is a craftsman’s workshop, in which we would recruit the very best people in the trade, to reestablish in Paris a salon for the greatest luxury and the highest standards of workmanship. It will cost a great deal of money and entail much risk.” — Christian Dior to Marcel Boussac

(17:00) Arnault believed that luxury brands could be larger than anyone at the time imagined.

(20:00) Arnault said this 35 years ago: “My ten-year objective is that LVMH's leading position in the world be further strengthened in the luxury goods sector. I believe that there will be fewer and fewer brand names capable of retaining a worldwide presence and that those of our group will be among them as we will provide them with the means for growth.”

(25:00) There are huge advantages for the early birds. When you're an early bird, there's a model that I call surfing—when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows. But people get long runs when they're right on the edge of the wave, whether it's Microsoft or Intel or all kinds of people, including National Cash Register. Surfing is a very powerful model.”  —  the NEW Poor Charlie's Almanack: The Wit and Wisdom of Charlie Munger. (Founders #329)

(25:00) One thing I learned from having dinner with Charlie was the importance of getting into a great business and STAYING in it. There’s a tendency in human nature to mess up a good thing because of an inability to sit still.

(25:00) The incredible career of Les Schwab: Les Schwab Pride In Performance: Keep It Going! by Les Schwab. (Founders #330)

(30:00) Dior in his autobiography: It is widely, and quite erroneously, believed that when the house of Christian Dior was launched, enormous sums were spent on publicity: on the contrary in our first modest budget not a single penny was allotted to it. I trusted to the quality of my dresses to get Christian Dior talked about. Moreover, the relative secrecy in which I chose to work aroused a positive whispering campaign, which was excellent (free) propaganda. Gossip, malicious rumours even, are worth more than the most expensive publicity campaign in the world.

(31:00) Munger: “There are actually businesses that you will find a few times in a lifetime, where any manager could raise the return enormously just by raising prices-and yet they haven't done it. So they have huge untapped pricing power that they're not using. That is the ultimate no-brainer. Disney found that it could raise those prices a lot and the attendance stayed right up. So a lot of the great record of Eisner and Wells came from just raising prices at Disneyland and Disneyworld and through video cassette sales of classic animated movies. At Berkshire Hathaway, Warren and I raised the prices of See's candy a little faster than others might have. And, of course, we invested in Coca-Cola-which had some untapped pricing power.”

Charlie Munger: The Complete Investor by Tren Griffin

(33:00) The benefits Arnault receives from owning commercial real estate: He makes money from his own stores, from leasing space to rivals—and from the appreciation of premium real estate. When LVMH buys a building, it takes the best storefronts for its own brands and often asks rivals to move out when their leases expire.

(35:00) Arnault is all about details. He has 200,000 employees and he’s paying attention to details about landscaping in the Miami Design District.

(36:00) If we lose the detail, we lose everything. — Disney's Land: Walt Disney and the Invention of the Amusement Park That Changed the World by Richard Snow. (Founders #347)

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