The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — LVMH is following through on a pledge to create more US manufacturing jobs, part of plan by Bernard Arnault, chairman of the French luxury conglomerate, to hedge against trade tensions and build on the rapport he's established with President Donald Trump.
Trump and his daughter Ivanka are set to open a new Louis Vuitton factory with a ribbon-cutting ceremony in Texas on Thursday alongside Arnault, who is LVMH's leading shareholder, and Michael Burke, the chief executive of its best-known brand.
In 2017, Arnault was one of the first CEOs to visit the president following his election, making the trip to Trump Tower along with his son Alexandre at a time when most fashion executives were paralyzed over how to approach the new commander-in-chief. Fashion was caught between threats of tariffs on foreign suppliers and concerns that consumers opposing Trump would boycott brands that supported the new administration.
Arnault, whose other luxury brands include Givenchy perfume, Hennessy cognac and Veuve Clicquot champagne, said at the time that the two had discussed increasing US production.
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The leather-goods workshop in Keene, a small town near Dallas, will create about 1,000 jobs over the next five years, the brand said in a statement — a drop in the bucket for the civilian US labour force of 164 million people, but possibly enough to strengthen ties with Trump, who ran on a platform of reversing America’s industrial decline.
“This is consistent with Louis Vuitton’s recent signing of the Pledge to America’s Workers, which aims to expand programmes that educate, train and support American workers,” Louis Vuitton said in a statement.
Much of the US handbag manufacturing industry moved abroad with the production of garments and footwear over the past several decades, to countries like China, Vietnam and India. Several of the biggest bag sellers, including Coach and Kate Spade owner Tapestry Inc., have worked to diversify their supply chains and make fewer items in China as trade tensions persist.
The Louis Vuitton Rochambeau Ranch, named after a French general who aided the colonies in the American Revolution, will house the plant, which will start with 150 workers. The goods it produces will be tagged “Made in the USA,” but won’t use leather from Texas cattle.
Key product categories for LVMH including handbags and champagne were spared from retaliatory tariffs against European exports, set to go into effect on Friday, in a dispute over subsidies to Airbus SE. The list includes other luxury items and drinks, including French wine and Irish whiskey.
Louis Vuitton has already dabbled in US production, making handbags and small accessories at plants in San Dimas, California. Arnault was a guest at Trump’s first state dinner, and First Lady Melania Trump has favored fashions from LVMH’s Christian Dior label for high-profile outings in France such as the D-Day remembrance ceremony in Normandy earlier this year.
By Robert Williams, with assistance from Kim Bhasin and Jonathan Roeder; editors: Eric Pfanner and Lisa Wolfson.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.