AlterNet: How the Luxury Industry Went the Way of McDonald's

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How the Luxury Industry Went the Way of McDonald's

By Emily Wilson, AlterNet. Posted September 19, 2007.


Even a Louis Vuitton handbag isn't much different from a Big Mac.



Today's $157 billion luxury industry outsources production to Chinese factories, dresses celebrities for red-carpet events, fights massive counterfeiting operations and builds designer outlet malls across America. All this is a long way from the industry's history of family-owned businesses handcrafting the best products possible.

Newsweek's style and culture reporter Dana Thomas explores the new luxury industry in her book Deluxe: How Luxury Lost Its Luster. She found that today's luxury marketplace is mostly about hype and marketing. The goal is no longer making something unique and beautiful but maximizing profits. AlterNet spoke with Thomas in San Francisco.

Emily Wilson: Was there something specific that inspired you writing this book?

Dana Thomas: Well, actually yes. I was reading Fast Food Nation, which is a great book, and I was so moved by how he'd taken the business apart and showed exactly what was going on and what was in your Big Mac. I turned to my husband and said I want to write this book about the luxury fashion business because in the 20 years I'd been covering the business, I'd seen how it had changed. I'd covered this evolution and revolution from a niche business to global conglomerates that do billions of dollars a year in sales, and I felt like most people who buy these goods had no idea what was in that bag they were actually getting. I was also a customer, and I grew disillusioned by the quality of the product in a lot of cases and wanted to find out what was going on and why.

Your second chapter is about Bernard Arnault. What is his role in the luxury fashion industry, and how did he change things?

He's been really the catalyst behind much of the change. In the mid '80s he acquired through a fire sale with the French government much of Christian Dior. Arnault, who was a property developer from northern France said, "Oh, I'll take over this whole big mess of a company, (which the French government had been trying to unload for some time), and I won't break it up and I won't do anything and I won't fire people," and then he got a hold of it, and he laid off thousands of workers and divested of just about everything except Christian Dior. So he did just the opposite of what he said he was going to do. It caused a lot of anguish in France, but he got away with it. Then he waged a takeover battle in France and won to takeover the group Louis Vuitton Moet Hennessey. It was a long fearsome battle in the boardroom and in the press, and he succeeded when he acquired the Louis Vuitton brand. And then he put this all together with Christian Dior and formed the first big luxury fashion group. He continued to either buy brands or acquire them hostilely, and today it's a group of more than 50 brands and does billions of dollars a year in sales. .....(more)

The complete piece is at: http://www.alternet.org/story/59078/