Antoine Arnault at the helm of Loro Piana and Berluti
As a youngster, Antoine Arnault spent summers accompanying his father, Bernard to a sunny Italian piazza in Portofino to pick out polo shirts and sweaters from the Loro Piana shop there. “It was one of the only brands outside the group that my father and I would wear,” remembers Antoine, now 38. “The style is classic, and that’s what we liked.”
Fast forward to 2013 and LVMH acquired an 80 per cent stake in the family-run, ultra luxury lifestyle, clothing and textile brand for $US2.6 billion ($AUD3.6 billion). This was the largest acquisition since LVMH paid $US5.2 billion ($AUD7.2 billion) for 50.4 per cent ownership of the Italian jewellery house Bulgari in 2011. It surprised some industry observers, especially as Loro Piana had never officially been for sale.
“It was a family business and not on the market—it was untouchable,” Antoine Arnault, who is now chairman of the board of directors of Loro Piana and CEO of LVMH menswear brand Berluti told The Wall Street Journal. It was the late Sergio Loro Piana, who was then co-CEO with his brother, Pier Luigi, who brought the idea to LVMH. “He told us that they had decided to sell the company, and if we were interested, we were the ones they had chosen,” says Arnault. The deal was swiftly drawn up and completed in a matter of two weeks.
“They were not buying because we were nice people but because they need us,” said Pier Luigi Loro Piana, 64, who currently holds the title of Deputy Chairman.
The thriving luxury yarn and textile arm is one of the world’s largest—producing 14.8 million feet of fabric in 2012 in such materials as wool, baby cashmere, cotton, vicuña and linen. Such material is a precious asset for LVMH’s stable of luxury brands including Dior and Louis Vuitton. Then there is the ever-growing Loro Piana men’s and women’s ready-to-wear collections, which are currently sold in 160 stores worldwide, in locations such as Aspen, Colorado, St.-Tropez and Palm Beach, Florida.
And the same clientele who turn to Loro Piana for their wardrobe can also outfit their private jets and yachts with fabric from the burgeoning interiors business. There are seven factories in Italy and vicuña farms high up in the Andes in Peru and Argentina. (It takes the fleece of 35 vicuñas to make a single Loro Piana coat, and each vicuña can be sheared only biannually.)
“Sergio asked that I never bring a star designer into this company,” says Antoine Arnault. “Sergio had seen what had happened to other brands where designers become the brands. But even if he had not, I would not have done so. It would have been heretical and the opposite of what the customer wants.” Beyond the intricacies involved in a conglomerate taking over a family business with complex supply chains and more than 2,500 employees, the largest task to date for Arnault and current CEO Matthieu Brisset has been to maintain the brand’s quality controls and general attitude of sartorial serenity. “We received so many letters at the time of the acquisition,” Arnault says. “Our goal is not to change much.”
Loro Piana dates back to the early 19th century, when they became successful wool fabric merchants. By the turn of the century, the family owned two wool mills of their own. In 1924, the enterprising Pietro Loro Piana, Pier Luigi and Sergio’s great-uncle, established the company name; the business enjoyed a boom in the post–World War I years as the taste for luxury fabrics grew in both Europe and America.
Decades later, in 1975, Sergio and Pier Luigi took over the business. The two brothers invested in production machinery that helped safeguard the company as the European textile business lost out to Asia in the ’80s. As a result, Loro Piana managed to hold its own, relying on a network of Italian factories that dye, spin, weave, knit and finish garments, some 24 hours a day, seven days a week.
“The two of us did not invent anything, but we took the best we got from my father and tried to develop and follow his guidelines,” says Pier Luigi. “There are people who show me that they are wearing a Loro Piana vicuña cashmere coat that might be 30 years old. I say, ‘It’s great that you did not become fatter!’ ” he says, slapping the table.
Antoine Arnault sees a way for Loro Piana to expand into the leather-goods business as well as capitalise on the appetite in China, Hong Kong and Singapore for the types of “noble” fabrics that Loro Piana produces. “There’s a huge opportunity to compete with the bigger players,” he says. “The synergies of the group and its ability to leverage will help Loro Piana.”