In part one of this series, we looked at how each brand – Louis Vuitton, Moët &Chandon, and Hennessy – established themselves. Now to continue, we will look at how they grew and maintained their early success. This is where we start to see these brandsforming into the ones we recognise today.
LV: An Icon is Born
Imitation is the Greatest Form of Flattery
When we last left Louis Vuitton, he had just invented a new kind of flat trunk that was a revolution in the luggage world. His trunks were considered hallmarks of style adding prestige to their ownership. He had the killer product, now he needed the right people to buy them.
Louis Vuitton did find the right clients and they weren’t his local butcher. He was making bags for likes ofKing Alfonso XII of Spain, Tsar Nicholas II of Russia, and Ismail Pacha the Viceroy of Egypt. Few clients are more prestigious than royalty.Royals loved Vuitton’s products because of the fantastic quality of the materials used, the specific arrangement of the interiors, and the fashionable style ofthe finishing. Bags were purely for practical purposes; they were not fashion statements. Until Louis Vuitton. Business was good.
Business was in fact so good that everyone wanted a Louis Vuitton bag but far fewer could afford it. As such, imitators started to appear. To combat counterfeiters, Vuitton released new designs featuring the now iconic brown and beige stripes in 1876. This worked for a while but by 1888, cheap counterfeiters imitated that too. Vuitton retaliated with a hand painted checkered pattern that was much harder to reproduce effectively. This was the start of Louis Vuitton’s still ongoing battle with counterfeiters.
Louis had a son, Georges, in 1857. Georges was trained in the luggage-trade since he was a young boy. When he was older,Georges played a pivotal role in the management of the business while his father was busy creating the trunks. His true potentialappeared in 1885, when the brand was expanded by Georges when he opened the first Louis Vuitton branch in
Georges’ influence was widespread. In 1886, he had invented a new lock for the trunks. The Tumbler Lock was made from twospring buckles and was supposedly unpickable. The Vuitton’s were so confident about the new lock, they challenged escape artist, Harry Houdini,to escape one of their trunks equipped with the Tumbler Lock. Houdini denied the offer. Either Houdinididn’t think it wasan exciting enough escapade or he didn’t think he could escape at all. Whatever the case, it highlighted the Vuitton’s confidence in the lock. Sales soared and the Tumbler Lock was so effective that it is still the lock used today!
1892 saw the fall of a titan. Louis Vuitton had died, and possession of the business passed on to Georges. There was little time to mourn. Georges had big plans for the brand. His eyes were set on the worldstage. To start, he went to America, to the Chicago World’s Fair in 1893. Enough interest was garnered for Vuitton products in America that Georges took a tour of a few American cities like New York, Philadelphia, and Chicago to sell Louis Vuitton products. Georges’ dream of expanding the brand overseas was becoming a reality.
In a two-pronged attempt to honour his father and stop counterfeiters, a new design was introduced in 1896. This design was the iconic ‘LV’ monogram paired with the familiar geometric shapes and flowers still in use today. It was an immediate success both in sales and as counterfeit prevention.
The early 20th century saw massive moves of expansion from the brand.In Paris, the Louis Vuitton Building was opened on the Champs-Elysees in 1913, the biggest travel-goods store in the world at the time! Distribution expanded with stores appearing in Boston, Chicago, San Francisco, Brussels, Buenos Ares, Nice, Bangkok, and Montreal.
War Never Changes
The First World War was a hard time for everyone in Europe and Georges Vuitton was no exception. Production was changed in order to assist the war effort. Instead of luxury trunks they produced military trunks. By the last year of the war, 1918, the German offensive was only 60km from Paris. Georges struggled to find materials to supply his factory and he couldn’t guarantee his worker’s safety. As you can imagine, productivity and sales were poor.
After the war, the economic conditions did improve,and the brand’s stylish clientele began to return. Special orders were made for the likes of Coco Chanel, the Vanderbilts, and the then French president, Raymond Poincaré. Butit wouldn’t last.
The Great Depression spared no one in its devastation. Georges knew that the brand needed to increase profitability somehow.He brought on his son, Gaston, to see if he could help improve things with a set of fresh eyes. They came up with the idea of an advertising agency to create detailed sketches of their products to show customers before they were created. This allowed for sales that weren’t special orders which had become a necessity.Georges died in 1936 and his death led to a sharp decline in special orders. Gaston refused to let the business die like this.
Gaston decided that the business should move further away from special orders and focus on their catalogue offerings. For this to be worth it Vuitton expanded their products to include trunks for typewriters, radios, books, rifles, and wine bottles.Before they even knew if it would work, another disaster occurred, the Second World War.
Under the German occupation of France, overseas contracts were terminated, a blow to profits. To make things worseboth the factory and moststores were closed. But it still wasn’t a complete disaster for Louis Vuitton. Much like Hugo Boss, Louis Vuitton collaborated with the Nazis. In a move that has been heavily criticised since, the business allegedly produced artifacts for the puppet-state and had a store on the ground floor of the Hotel du Parc, the building in which the Nazi controlled government was based. It was alleged that Gaston’s son, Henry, was the one to produce the artifacts.Louis Vuitton have never denied their involvement and have made it clear that they regret their actions and do not sympathise with Nazis. Despicable as it may have been, it did save the business.
Before the Merger
After WWII, business continued as usual with the brand focused on a greater range of diversification within their products coupled with consistently increasing amounts of advertising. Counterfeits had increased in Asia so Gaston, in 1969, a year before his death, opened the first store in Tokyo to offer real Louis Vuitton products in the Asian market.
In 1977, things were about to change. Gaston’ daughter, Odile, got married to a man named, Henry Racamier. Racamierwas a former steel tycoon and when he took over management of Louis Vuitton in 1977, the brand hit the next level. Sales in 1977 were $20 million per year. Not bad by any means. Butby 1987, Racamier had pushed that number up to $1 billion. He understood that the major profits were available in retail and to succeed on an international level, the company would have to increase its presence in stores. Many new stores were therefore opened between 1977 and 1987.
It was Racamier who brought Luois Vuitton such success that they were able to absorb other brands including Moët &Chandon and Hennessy. 1987 would be a year for the history books.
Moët &Chandon: What’s a King to an Emperor?
After Claude Moët’s death, his grandson, Jean-Rémy Moët took control of the business in 1789. Jean-Rémy, like Georges Vuitton,wanted to take the brand onto the international stage. Operations were therefore greatly expanded in order to supply what was hopefully a large increase in demand.So the first step was to buy the vineyard of the nearby Abbey of Hautvillers in 1794.But it was a friendship createdby chancethat gave the business international prominence.
In 1782 Jean-Rémy visited the military academy, Brienne-le-Chateau, to solicit orders for his champagne when he met Napoleon Bonaparte, the future Emperor of France. They must have gotten along quite well because their friendship would last both their lifetimes.
When Napoleon became Emperor of France, he was constantly at war. But on his way during a military campaign, Napoleon would always make a point of visiting the Moëthouse to pick up cases of champagne. Legend has it that it was Napoleon’s troops that invented the tradition of popping bottles with a sabre. Napoleon loved the wine so much and thought of Jean-Rémy as such a good friend that he was awarded one of the highest honours in France, the medal of the Legion d’honneur.This only increased Moët’s reputation. The only exception to these regular visits was just before the Battle of Waterloo, where Napoleon met his downfall.
Once You Pop, You Can’t Stop
After the defeat of Napoleon at Waterloo, the Moët house found that their security was not guaranteed. The Champagne region was being occupied by Russian troops. They hated Napoleon and knew how much he liked Moët’s wine. Fines and requisitions were therefore ordered on the entire Champagne region. Almost everybody’s cellars were plundered but none more so than Moët, with some 600,000 bottles taken by the Russians.
Jean-Rémy is recorded to not have resisted but instead said, “All of those soldiers who are ruining me today will make my fortune tomorrow. I’m letting them drink all they want. They will be hooked for life and become my best salesmen when they go back to their own country.”
These were prophetic words as sales soared after the Napoleonic period. During the 1820’s, sales are believed to be20,000 bottles per year. Considering that their clientele was the 1% these numbers are impressive. Further, prestige was added to the Moët name asnew buyers appeared from around the world. These included some of Napoleon’s enemies like Arthur Wellesley (the Duke of Wellington), Frederick William III of Prussia, William II of the Netherlands, the Holy Roman Emperor Francis II, and Tsar Alexander I of Russia, the man who ordered the requisitions of champagne.
In 1832, Jean-Rémy retired and passed the business onto his son Victor. Moët et Cie became Moët &Chandonin 1833 after Pierre-Gabriel Chandon joined as a partner. Victor and Pierre further expanded the operations of the brand.
During the 1860s Moët &Chandon introduced Moët Imperial in honour of Napoleon. This quickly became their best-selling product whose production and impressive sales continue today.
By 1872, they were selling roughly 2 million bottles a year. By 1880, that figure jumped to 2.5 million. Almost all their clientele were very wealthy and belonged to the upper echelons of society. And while the 20,000 of the 1820s was impressive, it seems insignificant in comparison to these numbers.
To further diversify their products, the company introduced one of their most prestigious products, Dom Perignon, in 1921.Well, the vintage was 1921 but the wine didn’t actually go on sale until 1936. Once it did it was quickly called the best champagne in the world by connoisseurs and waseasily one of the most expensive. Both those accolades are still relevant in 2021.
Thinking About the Future
During the 1950s, Count Robert-Jean de Vogüé, one of France’s leading figures in winepurchasing, assumed control of the company and led the brand to its highest period of growth to date. The brand went public, becoming a corporation, which led to acquisitions and mergers. They purchased their rivalsRuinart Père et Fils in 1962, Mercier in 1970, and then perfume company Parfums Christian Dior, their first venture outside of champagne.
1971 was the year the merger between Moët &Chandon and Hennessy occurred.This merger was implemented in part due to a French statute that limited the Champagne growing region to 34,000 hectares. While only 25,000 hectares were being cultivated at the time, de Vogüébelieved that the growing demand of champagne would exhaust the supply of land by the year 2000. So, until other suitable regions could be found for champagne production, the Hennessy merger would allow for a broader financial base and greater diversification of products available.
The company continued this trendwith a focus on expanding into the United States for the next decade with strong sales. By 1987, Moët-Hennessy was in trouble.The companystill hadn’t realised an $11.7 million investment in research and development made in 1983 and 1984. They needed help or risk a hostile takeover. Butin 1987 an opportunity was being presented to them by Louis Vuitton.
Hennessy: An Uneventful Success
It’s All About Expansion
Not much is known about the Hennessy brand’s historyexcept what has been shared by the brand itself. What they have shared is a story about continuous expansion across the globe. The early struggles of the brand were now a thing of the past.
1794 saw Hennessy reach American shores for the first time and its popularity continued to increase over time in the newly birthed United States. This was huge for the time and it set the brand’s goals to further international expansion. However, Richard Hennessy died in 1800 without seeing where the brand would go.
With loftier goals of international distribution, Hennessy felt that sturdier means of transportation were required. For the first time, labelled glass bottles were used to distribute cognac in 1804.
The brand was becoming popular amongst the gentry and nobility. A must for luxury brands in this period.In 1817 the Prince of Wales, future King George IV of Great Britain, requested Hennessy to create a special cognac for him that was described as a ‘very superior old pale’ cognac. The newly created V.S.O.P has since been used as a benchmark of quality for Hennessy.
Word of this request must have spread because the following year, in 1818, Empress Maria Federovnaof Russia also asked the brand to produce the most exceptional cognac they could for her sonTsar Alexander I’s birthday. Since then, the royal family of Russia consistently ordered shipments of Hennessy.
1819 saw Hennessy expand into India, providing enjoyment to the English governors and officers residing there as well as the Indian nobility. After India, Australia received their first shipment of cognac in 1852. Australia became one of Hennessy’s best customersand it retained its popularity until 1914!
The brand symbol, the Bras Armé, was established in 1856. The symbol is a reference totheHennessy coat of arms. Shortly thereafter, the first shipment reached China for the first time in 1859, then Japan in 1866, and Brazil in 1869.
A new quality was created and was dubbedX.O (Extra Old). This was originally created just for close family and friends but eventually the brand believed they could sell it worldwide. X.O became a worldwide reference for cognac that is still applicable today.
Business continued much like this until 1971 when they merged with Moët &Chandon to become Moët-Hennessy. As mentioned earlier, this assisted Moët in their goal of product diversification and Hennessy seemed to have had no problem with the merger as they found it mutually beneficial, adding a large amount of prestige to the Hennessy name. But by 1987, the Moët-Hennessy brand had made some poor financial decisions and was at risk of a hostile takeover.
Where To Next?
These brands all earned their prestige due to their commitments to quality. At this point in their history, they have survived many world events, trials and tribulations etc. What took them to the next level though was the 1987 merger that created an absolute powerhouse of a company. In the next part we will look at this merger and how LVMH has continued operations into the present. Make sure you check Ten Pieces of Eight regularly for this release!