Louis Vuitton 2009 Financial Analysis. Includes: Luxury Market Analysis, Competitors Analysis, F Inancial Statement Evaluation, Accounting Ratios Analysis.

8414 words - 34 pages

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ESCP-Europe School of Management

Master in European Business

Financial Accounting Project

Analysis of LVMH 2009 Financial Position

s

Andrea Pierobon, Eric Paul Sadler, Carolin Rademacher, Marco MagnettoThe History of Louis Vuitton

In 1835, at the age of 15, Louis Vuitton became an apprentice packer and trunk-maker under the famous Monsieur Maréchal in Paris. Already a very skilled woodworker and trunk-maker, a skill he learned from his father, Vuitton spent much of his apprenticeship packing the clothes of wealthy women before their long trips. He even frequently packed for Empress Eugenie and her ladies in waiting at the Tuileries Palace.

18 years later Louis Vuitton finally opened his first store at 4 rue Neune des Capucines. His success budded from his expertise in the use of wood, silk, and satin. In addition, he reformed the design of the dome-top trunk making them flat-topped which were far easier to stack during journeys. He was well known for his trucks covered in grey Trianon canvas and his master luggage-making abilities.

Eventually as business grew, he moved his store location to 1 Rue Scribe as well as build workshops outside Paris to make wood transportation a lot easier. He focused more heavily on trunk-making rather than packing, and as a result of the quality of materials and overall design, he gained clients like King Alfonso XII of Spain and future Czar Nicholas II of Russia.

Much of the company's success in later years came from their constant ability to adapt to changes in the way people travel and differentiate themselves from the competition. For instance, Vuitton changed his grey canvas to red and beige or brown and beige stripes and later a chequered pattern to combat imitations. Also Vuitton created trunks for sleeping cars, lighter versions of the trunks, and his son Georges even made a theft-proof 5 tumbler lock. Sadly in 1892 Louis Vuitton died and his son Georges took over the company. He redesigned the canvas again using his father's initials with flowers and stars in remembrance of the company's founder. This design was an instant hit.

Georges played a very important part to the management and growth of the company. He opened the 1st Louis Vuitton store in London in 1885. Noticing the importance of sales abroad, he expanded distribution to NY, Philadelphia, Boston, Chicago, San Francisco Brussels, Buenos Aires, Nice, Bangkok, and Montreal. He continued his father's tradition of keeping up with changing trends in travel and began making trunks for automobiles and their spare tires, trunks for airplanes and hot air balloons, and even bags with travellers in mind.

World War I created difficult times for maintaining exclusive clientele's business. A significant amount of the company's efforts went into producing stretchers for the war. Furthermore it was very difficult to supply factories with material no...

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