Louis Vuitton uses new workshops to mix politics and business

LVMH chairman Bernard Arnault plays up his company's 'Made-in-France' credentials to command the attention of the country's political elite

LVMH chairman Bernard Arnault and his son, Frederic, chief executive of TAG Heuer, attend the opening of the company's new workshop in Vendome. AFP

Opening a new workshop in rural France isn’t typically a headline-grabbing event. Unless the country’s richest man is the host.

LVMH chairman Bernard Arnault, who is the world's third-richest person with a net worth of $157 billion, showed up in the Loire region with an A-list entourage that included his son Frederic, who heads the TAG Heuer watch business, and French Finance Minister Bruno Le Maire.

A throng of 70 visitors toured the two complexes, where Louis Vuitton will be making a variety of bags and eventually create 400 jobs.

The event highlighted how the chairman of LVMH can command the attention of France’s political elite by playing up his company’s Made-in-France credentials. Louis Vuitton is a marquee industry for France, for which luxury fashion is a cornerstone of its economic and cultural heritage.

The new complexes are situated in the towns of Aze and Vendome, where the site occupies an 11th-century abbey that was renovated at a cost of about €20 million ($22.7m).

The additional venues will help to alleviate a supply crunch that is reverberating across the industry as well-heeled shoppers clamour for handbags, belts and other high-end leather goods.

Only last week, arch-rival Hermes International said it was not able to meet demand for its leather products that include the Birkin bags. Hermes plans to add three manufacturing sites in France through to 2024.

There is an “auspicious” economic environment in France, which is the most attractive in Europe for foreign investments, Mr Arnault said. “Our craftswomen often manufacture products that have wait lists.”

Earlier this month, a group of workers at three Louis Vuitton manufacturing sites staged walkouts amid a dispute over working hours.

Louis Vuitton settled on a labour framework last week that reduces the working time per week by two hours to 33 hours, as well as increases the average wage by 7 per cent, or about €150 a month, a representative for the brand said.

Workers at Louis Vuitton “are among the best-paid”, which keeps them loyal, Mr Arnault said at the opening of LVMH's new workshops.