In any negotiation process there is likely to be a fair amount of posturing as both sides position themselves for maximum leverage. When Bernard Arnault wanted to acquire Tiffany & Co., for example, he went as far as building a Louis Vuitton factory in Texas to win over the president of the United States.
Before going public with LVMH’s intention to acquire Tiffany, Arnault wanted to ensure that his efforts to own the iconic American brand would not face any hurdles from the US government. He set in motion a plan to gain the support of a person who could remove any potential roadblocks from the deal’s approval process – US President Donald Trump.
In October 2019, LVMH opened a new factory in Texas for its Louis Vuitton brand. The move raised eyebrows in the luxury retailing world because manufacturing operations for Louis Vuitton were primarily based in Europe (mainly France and Italy). LVMH promised to provide 1,000 jobs for Americans at the Texas facility, but only 150 were employed at the time of its opening. Arnault nevertheless managed to get President Trump to attend the facility’s opening ceremony (See Exhibit 3). At the ribbon cutting event, President Trump promoted his administration’s success in bringing manufacturing jobs back to the US and noted, “[t]oday, we continue the extraordinary revival of American manufacturing and we proudly celebrate the opening of the brand-new Louis Vuitton – a name I know very well… cost me a lot of money over the years.”