Bernard Arnault: Captain of the flagship of the bourgeoisie
Do you also want to be broke, have so much dough that writing a super badass check to save Notre-Dame de Paris sounds like a small gift (almost 4 times the amount of the Telethon on its own )? To achieve this degree of excellence, Bernard Arnault's luck did not happen by itself, nor in a day. Back to the cascade of events where Bernard Arnault using trickery was able to ransack the Boussac group.
To go back to the origins of Bernard Arnault's fortune, we have to go much further back. One name: Marcel Boussac (1889-1980). Fallen into oblivion in history, he was the richest man in Europe 1 , like B. Arnault today. Big boss of French textiles, nicknamed the " king of cotton “, supplier of the French army during the war, collaborator when necessary, but also an ally of circumstance with the Resistance. Marcel Boussac is a boss as his time knew how to produce. Top hat, owning castles, stud farms and racehorses. The Boussac empire had at its peak up to 21,000 employees throughout France after the Second World War, including a small nugget named Christian Dior, who caused a stir in haute couture circles in 1947...
Reactionary, nationalist, fierce opponent of decolonization, owner of several media ( l'Aurore , Paris-Turf ), proud paternalist, autocratic, Boussac did not see the upheavals of the sixties coming and persisted in old-fashioned management. of his group. In 1962, Crédit Lyonnais asked Boussac for his personal guarantee. In short, his personal assets are at stake for any credit application or to cover losses. Over time, the losses increased: 50 million in 1976, 100 in 1977 and 160 announced for 1978.
Ruined, cornered by debt, Boussac was forced to sell his empire in 1978 to the Willot brothers. He dies two years later.
Here Come the Daltons [1978-1981]
The four Willot brothers (Bernard, Jean-Pierre, Régis and Antoine) are from Roubaix. Launched in the medical fabric, the family company created in 1905 experienced significant growth until its debacle in the 1980s. Outstanding industrial and financial managers, nothing stops those known as “the Daltons”. To their credit first, it is the success of the Peaudouce diapers, created in 1963 by the siblings, which we will discuss later.
But what marks above all is the bulimia of their acquisitions in the struggling French textile sector. They buy up companies that sink and ruthlessly carve into industrial groups. Their trick: separate the land activities from the actual textile activities. So some freshly purchased machines go to the other factories of the group, the real estate is sometimes simply sold to cover the costs of the initial takeovers, the staff is sometimes made redundant, their idea is to build a solid industrial group on the remains of an entire sector in decline. Undress Paul to dress Jean better, even if it means firing Paul (and being sentenced for " abuse of corporate assets "). Methods being perceived as cavalier by the rest of the textile bourgeoisie, but which suit successive governments who do not want to see industrial decline come suddenly.
The list of takeovers is long and the Willot empire became the largest textile group in France, to name only the best known: purchases of the Dazin-Motte cotton mill (Roubaix) in 1959, Agache (La Madeleine, Seclin ) in 1967, Saint-Frères (in the Somme including Flixecourt and Amiens) in 1969, Boussac (Vosges, Cotonnière de Fives, etc.) in 1978. But also in distribution, Le Bon Marché in 1970, La Belle Jardinière (1973) , Conforama (1976), the Belgian galleries Anspach (1978) and the American chain Korvette in the US (1979) 2 . The Willots, with “ 74,000 employees in 80 factories and 120 supermarkets located in France, Belgium, the United States and Africa 3 ” were perhaps too confident in the game of “ too big too fail ". But the acquisition of Korvette turns out to be a very bad business which goes bankrupt in a few weeks, the banks are more pressing, especially since the Socialists come to power. The main Willot subsidiary, Boussac-Saint Frères, filed for bankruptcy on June 26, 1981.
The state under influence? [1981-1984]
Filing a balance sheet is what? It is to declare in court that one is incapable of paying one's debts and relying on the State. And for the Willots, it's an opportunity to put pressure on the newly appointed Mauroy government. Pierre Mauroy, Mayor of Lille and Prime Minister of François Mitterrand, refuses job blackmail on his land in Lille: " Business leaders whose difficulties are due to indelicacy or incompetence will be treated with rigor, including including their personal property. ". The Minister of Industry, Pierre Dreyfus, does not beat around the bush: “ We have to make the Willots go for it ”.
The incredible imbroglio begins. The State sets up a team of managers to proceed with the receivership of the group, the Willots still own their shares but no longer have the right to act on them. The state will therefore manage and administer the disaster. He puts a billion francs on the table: a third finances the redundancy payments of some 4,000 people, another will go to the rescue of the industrial tool in investment, the rest will go to debts with suppliers.
Gérard Belorgey 4 one of the managers confides, in an auto-biographical document that exudes bitterness: “ We passed in front of the rows of houses whose families were looking at us on the doorsteps. (…) We took the time to explain, to respond, to reassure, and also to kill. We encountered more resignation than anger because we weren't seen as ordinary bosses; we also touched the simple and poignant despair of those driven out forever from the “humble life of boring and easy work” which had been their whole horizon, their whole dignity, their whole modest existence going to shreds ”. Dismissals, therefore, but with humanity, in a socialist way in fact.
Putting things in order and trying to straighten the bar were their difficult task, except that in the meantime the year 1983 marked the “ turning point of rigor ” and the arrival of the “ new left ”. It is out of the question to talk about nationalization, nor about state management which could seem too authoritarian.
Laurent Fabius is Minister of Industry, Mauroy Prime Minister, Mitterrand President. One evening in November 1984, Belorgey recounted: " I received the order to go urgently to rue de Varenne [au cabinet du premier, ndlr] to sign all the necessary withdrawals so that the agreement which had just been sealed between Willot and Arnault can be implemented […] I signed what I was asked to sign. Bernard Arnault was in ambush. When Gérard Berlorgey met Mitterrand during his vows in 1985, the scathing disavowal ""In the name of my convictions for employment, I would like to tell you, as I leave Boussac, how much such a serious issue deserves your attention. "The Head of State turned his head, turned his back on me and went off to talk to other people ”.
Arnault in the sheepfold [1984-1985]
You should know that Bernard Arnault is not made of the same wood as everyone else. When Mitterrand came to power, Bernard was 31, he was part of this caste who imagined " Soviet tanks parading on the Champs Elysées " and who feared for his pèze. He went into exile straight away in the United States in 1981, something other than an Erasmus stay!
And for good reason, he knows something about it. Monsieur was 25 years old when he was appointed construction director at Férinel, in 1971, the box of the father who was in the construction industry. Besides, it's not chic enough; in common agreement, son and papa-tron sell the " start-up " of the grandfather to devote themselves only to real estate development. This is where father and son have much more than a family relationship: they are partners. At 28, he became general manager, please, then succeeded his father at 29. Enough to give complexes in terms of “ meritocracy ”.
It seems that real estate promotions did not have the expected effects in the new world. But when Bernard returns to France, he has a nice address book. “ In New York, Bernard and his wife frequent the community of French expatriates, within which they become friends with (...) François Polge de Combret (former deputy secretary general of the Élysée under Valéry Giscard d'Estaing and banker at Lazard), (...) Claude Gros (president of the American subsidiary of the Institute for Industrial Development: IDI), a public investment structure which, in France, plays a leading role in the rescue of the Boussac group . 5 " It is said ! You don't go from construction to luxury in the blink of an eye, you have to have the right friends. Treason in the bourgeoisie is sometimes good and what is more has its origins in the bourgeoisie of the North, where we know how to find our way, sniff each other among posh neighbors, the family trees do the rest.
At the end of 84, Bernard Arnault made an agreement with the Fabius government. With his connections, he has built a solid case and promises fewer layoffs than his competitors on the takeover. On the one hand, Bernard Arnault promises 400 million francs of investments for the following year and to preserve employment in the group, on the other hand, the state brings in support some 750 million. 6
The editing sounds like a gamble for Arnault. The family fortune brings 40 million francs, he borrows from Crédit Lyonnais (then a nationalized bank) the tidy sum of 50 million (i.e. 90 million francs in cash for Arnault), with the banks Lazard and Worms then with Elf and Total. He ends up aligning the 400 million requested with only 10% of the sum in equity. With this arrangement and this promise, the State then sold its stakes in Boussac for a symbolic 1 franc. Cheap !
When a year later it is necessary to align the money in the form of a capital increase of the discounted 400 million. A small problem appears: the Willots still own 16.4% of the capital and want to ally with the Worms bank (10% of the shares) to do it upside down to Bernard. Whatever stops the Arnault machine, he buys the share of Willot at the market price of the day, ie 400 million francs. He borrows this sum from Crédit Lyonnais (again them!) End of the game for the Willots who have better things to do with their lawsuits but exit oh so profitable compared to previous proposals 7 .
And how does Bernard save his bet? Hold on tight. He creates the company " Bernard Arnault et Associés " which holds shares in the financial of the Boussac group, he opens the capital to 49% and seeks shareholders, he thus collects 530 million francs, which allows him to repay the Crédit Lyonnais for the purchase of the 16.4% of Willots. Not con, especially when the confidence of the shareholders reigns is faithful to the " captain of industry "...
From there, you have the Bernard Arnault recipe: create holding companies, keep decision-making control (51%), share the remaining 49%, get all these beautiful people on board in the middle of financial sharks. In the Camembert war, there is only one president left. The particularity of this one is to have started doped with public money.
The metaphor of the captain of industry can be spun much further into the imagination. If there is a captain, it is of a ship in the ocean of savage capitalism. Its crew is the multitude of these small carriers that trail in its wake. In search of the treasure, they adhere to the " vision " of a master predator at the helm of the flagship of the bourgeoisie. It is Bernard Arnault who determines confidence, who works on the image and the rate of return. The more one adheres to the bourgeoisie, the more one increases the self-fulfilling confidence of the rich made by the rich.
Bernard Arnault is the embodiment of benevolent wealth, whether for Claude Pompidou, Bernadette Chirac, Cécilia ex-Sarkozy or Brigitte Macron. It is the discreet black shadow that will wrap its flag around the cohort of influential former ministers of the republic. It's a French way of knowing how to be rich, with an almost divine grace for wealth, sometimes praised by politicians and the media, sometimes decried by François Ruffin in the documentary Merci Patron !
The Big Sale [1985-1987]
Bernard Arnault alone at the helm promises to save the company: " This plan, which provides for a limited session of non-strategic department, can in no way be equated with a dismantling of the company because disposals represent less than 20% of activity. ". Between 1985 and 1987, Arnault laid off 8,000 people and restored profitability. In 1988, the textile activities of Boussac (except Christian Dior) were sold to the Prouvost SA group , the Peaudouce nappies were sold the same year for 2 billion francs. In 1991, Conforama was sold to Pinault for 4.4 billion francs… even the Férinel family box was sold to Générale des eaux in 1995 (to become Nexity).
Cut in the workforce, dismember the company, it attracts investors, the share price soars, from 1987 the group weighs 8 billion francs, enough to catapult the construction millionaire into a Luxury billionaire.
In June 1987, LVMH was born from the merger of two luxury jewels Louis Vuitton (directed by Henri Racamier) and Moët Hennessy (directed by Alain Chevalier), the two men did not get along. Dior perfumes being the property of Moët Hennessy since 1971 (bought from Marcel Boussac in need of new money), Arnault only dreams of taking over the perfume brand eponymous to his luxury jewel. In October 1987, following a stock market crash, Arnault became a 25% shareholder in the LVMH group. A man reputed to be trustworthy, the two leaders called on Bernard Arnault, third shareholder, or "pivot" shareholder, to decide between the two cold bosses. Promises the finger on the seam for one as for the other, Arnault acts behind the scenes and rolls in flour all these beautiful people.
Today, the Arnault clan owns 47.44% of a group that weighs 340 billion euros, whose turnover in 2020 amounts to 44 billion euros. In the first half of 2021, net income, Group share amounted to 5,289 million euros, 10 times higher than in the first half of 2020. It is not wrong, Bernard, to tell the VDN "it will surprise you, and it is what I say to all my teams, we are still small ”.
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