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Industry Tycoons and The Battle for Culture

Industry Tycoons and The Battle for Culture

Fondation Louis Vuitton

Industry Tycoons and The Battle for Culture
November 09
23:32 2014

The Medicis are back.

But today, instead of supporting the arts with the proceeds from their banking businesses, they are doing it by selling fashion. France’s two legendary luxury tycoons – Bernard Arnault and Francois Pinault – have now taken their well-known competition to a new, higher plane: the world of contemporary art.

“As the Medicis and other leaders during the Renaissance would support their favorite artists, so many luxury brands are starting to endorse crafts specifically overlapping their core values or their DNA,” says David Dubois, Assistant Professor of Marketing at INSEAD in Fontainebleau.

Critics here in Paris argue latter-day Medicis are merely showcasing their brands rather than supporting art. But it may be good for business in the long term and it is demonstrably interesting to the public in the short term.

The latest marker in the sand of this hugely expensive war is the 26,000 square meter aluminum, and glass art museum in the children’s garden of the Bois de Boulogne on the western outskirts of Paris designed by American architect Frank Gehry consisting of 10 exhibition halls, an auditorium, and roof terraces for events. It is meant to showcase Arnault’s private collection and host special exhibits. The Foundation Louis Vuitton (FLV) took 10 years to complete – including getting an act of Parliament to override legal delays created by annoyed neighborhood groups – and cost three times the original estimate of $143-million (none of it from the French state), according to some French press reports.

It is something to see: looming up from the surrounding trees as a great glass cloud, a plateaued waterfall cascading towards the museum reminiscent of Le Notre’s famous waterworks at Versailles – an analogy fitting contemporary art. If it weren’t for his arch rival Francois Pinault (age 77), whom the wall Street Journal called “possibly the single most powerful art collector in the world,” Bernard Arnault’s (age 66) claim to being a latter day Mycean magician would be complete.

Francois Pinault houses his collections in two buildings along the Grand Canal in Venice: the first, Palazzo Grassi, was purchased from the Fiat Group in 2005 for $37-million after Pinault walked away from French bureaucracy in frustration when years of negotiation to build a $195-million museum the Ile Seguin outside the city came to naught. The first exhibition at the Palazzo Grassi – consisting entirely of works from Pinault’s own collection – opened in 2007. When it became clear that one palazzo would not be large enough to showcase his 2,500+ works of art, Pinault entered a bidding war for the 33-year rights to the Punta Della Dogana (customs house) at the tip of the Grand Canal, beating out the Guggenheim Foundation (whose Peggy Guggenheim museum is just downstream). The first eponymous Pinault collection exhibition there opened in 2009.

The Culture Wars
The two businessmen have been in fierce competition since the great handbag wars that started in 1999, when LVMH sought to become a majority stakeholder and obtain a Board seat in Gucci . Gucci management (led by Harvard-trained lawyer Domenico de Sole) found a white knight in Pinault who, ipso facto, laid the cornerstone of his own luxury empire (Pinault Printemps Redoute, then PPR) by purchasing not only Gucci but floundering fashion house Yves Saint Laurent as well. Arnault sued on behalf of LVMH (his shares were ultimately purchased by PPR at a premium) and began expanding his own luxury empire.

Today LVMH owns such brands as Marc Jacobs, Dior, Kenzo, Celine, Fendi, Bulgari, Givenchy, Donna Karan…PPR (now renamed Kering) owns Bottega Veneta, Sergio Rossi, Stella McCartney, Balenciaga, Alexander McQueen, Puma…

Then Pinault bought Christie’s auction house, and Arnault just had to have one too, so he bought Phillips. Today, some dozen years later, Pinault still owns Christie’s. Arnault sold Phillips at the height of the financial crisis at a sizeable loss.

Since retiring a decade ago and   handing the reigns over to his son – who changed the group’s name and sold off the department store part of the business (Paris’s Printemps is now owned by the Qatari sovereign investment group) – Pinault the elder has focused entirely on art and supporting artists and is reported to have a far richer contemporary art collection than Arnault who – though France’s wealthiest man – is still working for a living as Chairman and CEO of LVMH.

Arnault is on record as saying he believes the success of LVMH is based largely on its relationship with the artistic image of France, adding that he wanted to build his museum to “underline French creativity in the world.” Pinault speaks of allowing his collection “to be appreciated by as many people as possible…it might change their lives.” Indeed, Kering’s new corporate slogan is “empowering imagination.”

The art wars between France’s two emperors of luxury have escalated alongside their business interests. Both men began collecting in the 1980’s – Arnault with a Monet, Pinault with a Mondrian. Now the museums: Pinault claims to be considering one in Asia; Arnault’s Bois de Boulogne property reverts to the city in 55 years.

LVMH and Kering are by no means alone in building private art museums. The late Spanish banker Emilio Botin commissioned the Centro Emilio Botin in Santander; businessman Eli Broad has proposed an installation in Los Angeles. Companies such as Tod’s are helping fund the restoration of Rome’s Coliseum.

But is it “Art”?
But are cultural forays such as these more about art or about brand marketing? One scathing commentary in the French press described the FLV museum as “an oligarch’s commodification of artistic creation to burnish his own brand.” More sanguine observers put it differently, and call the shift to creativity and away from ostentatious logos part of the shift in the consumer him or herself.

“As luxury brands rely on low volumes (to remain “exclusive”), they have had to rethink how to recreate distance between luxury and masstige, or “premium brands,” says Dubois.

“Association to art, through its core characteristics, can elevate what luxury brands stand for and separate them from the rest of the market. Bringing art into luxury is a powerful way to responds to the growing need to generate storytelling associated with craftsmanship, of which the figure of the artisan is at the front stage.”

Luxury companies today would like us to see them as repositories of creativity, preservers of heritage, and custodians of good taste. Being associated with art and culture adds nobility to brands that are already glamorous and distinguished. That cannot hurt sales. And if private passions have now become another stage for competition, on which businesses will strive to outdo themselves serving the public good…well, that’s not at all bad.

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Irina Dashkina

Irina Dashkina

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