This weekend's FT has a short profile of Bernard Arnault of LVMH. "There is nothing so dangerous as the pursuit of a rational investment policy in an irrational world," said John Maynard Keynes, but Arnault has proved the exception. Aside from Hollywood, luxury fashion may be the most unbusinesslike business in the world. Yet Arnault has managed to succeed at it like no one else. So he's worth studying.
Also worth studying, I think, is Giorgio Armani, the subject of a new biography. I'm not in a position to judge his contributions to fashion, but I can say that on the business side, he may be the most successful founder-owner-operator in fashion history. Not that the bar has been set that high in this industry, mind you, but to me that only makes Armani's accomplishments more remarkable. The history of fashion shows that it's almost impossible to unite creative and marketing genius, business sense, and . . . um, the Protestant work ethic in one person. Among American designers, Calvin Klein and Donna Karan both ran into business problems. Ralph Lauren is a great businessman but not considered a great or original fashion designer (Going back in time, I'd put Oleg Cassini in this category as well). Halston and Marc Jacobs were undermined by personal problems. In Europe the Tom Ford/Domenico de Sole partnership at Gucci had great success, but lacked longevity (although they're back together again, so stay tuned). The Yves Saint Laurent/Pierre Berger and Valentino Garavani/Giancarlo Giammetti partnerships also enjoyed great success but on a much smaller scale than Armani. Armani's rival Gianni Versace excelled at the fashion side but not the business side.
To the student of business, Armani is the best. From scratch he built, completely organically with no acquisitions, a company worth about $5 billion, which he continues to own outright, with no strategic need to sell out to LVMH or PPR or anyone else. Apparently it has no debt, and maintains a large cash reserve at all times. Yes, he is the best. His company is the one Buffett would buy if Buffett were ever to buy a fashion business! Only a blogger could ever say anything so crazy, but stranger things have happened.
Update: A 2006 WSJ interview with Giorgio Armani.