On Thursday two of the most powerful brands in politics and high fashion collided in Johnson County, Texas, a rural area about a half-hour’s drive south of Fort Worth.
They met in a blur of pomp, supple leather and mutual appreciation as President Donald J. Trump joined Bernard Arnault, founder and chairman of LVMH Moët Hennessy Louis Vuitton, the largest luxury group in the world, to cut the symbolic ribbon on a new Louis Vuitton workshop.
Two entourages were there: on one side, Ivanka Trump, Commerce Secretary Wilbur L. Ross Jr., and Labor Secretary Eugene Scalia (among others); on the other, Mr. Arnault’s second son, Alexandre, chief executive of Rimowa (a German luggage brand owned by LVMH), and an assortment of Louis Vuitton executives, including Michael Burke, the C.E.O.
Outside, a herd of 14 Red Angus cattle roamed a nearby field, with a Brahma bull, also named Michael, among them. Inside the 100,000-square-foot building of glass and stone, an oil portrait of the brand’s founder by Alex Katz hung on a wall, next to a poster of George Washington, overlooking rows of shiny white sewing machines and trays of glinting gold handbag hardware. An American flag was displayed next to a French flag next to a Texas flag.
“This is some place,” said Mr. Trump, standing on a makeshift stage in front of a backdrop studded with spools of thread, like concept art. Earlier he had been given a brief show-and-tell on the workshop, and had gotten to hoist one of the LV monogram bags and to watch an artisan at work. He said Mr. Arnault was an “artist” and a “visionary” who was making a great investment in Texas, and American jobs.
Then he said, “Louis Vuitton” — he pronounced it “VOO-ton” — “a name I know very well. It cost me a lot of money over the years.” Next to him, Mr. Arnault grinned. As jobs were discussed, he gave a thumbs up. Later, the men moved to the blue-and-gold Louis Vuitton ribbon and stood side-by-side with their scissors, flanked by their teams.
It was a potent photo op (even though Mr. Arnault’s shears seemed to get stuck). It was not hard to understand why Mr. Trump had made time to stop by.
But what was LVMH, which also owns brands such as Dior, Givenchy, Marc Jacobs and Sephora and has numerous American celebrities on its payroll, getting out of it?
Besides becoming the first major fashion group to so publicly align itself with the president, of course. With all the immediate brand equity risks and potential rewards if Mr. Trump wins a second term that implies. Not that the group would put it that way, exactly.
What Mr. Arnault said was: “We are very honored to have the President of the United States coming for the opening.”
He also said, “I am not here to judge his types of policies. I have no political role. I am a business person. I try to tell him what I think for the success of the economy of the country, and the success of what we are doing.”
In an interview earlier, Mr. Burke noted Mr. Trump was a “democratically elected president,” and if that president wants to come christen a new workshop, well — “How should we react?” As for the fact that the event just happened to be sandwiched between a re-election fund-raiser and a rally, “we have nothing to do with the timing.”
Whether a claim of being apolitical can survive the optics of the presidential helicopter landing on the newly mowed field of a ranch with “LV” carved into its stone columns, however, is another question. Especially at a time when consumers are increasingly demanding brands stand up, and speak up, for their values.
Risks
“There’s a lot of anger out there right now against the Trump administration,” wrote Shannon Coulter, the founder of #grabyourwallet, the social media campaign to boycott brands financially connected to the Trumps, in an email. “I think Louis Vuitton is about to find out just how much.”
This is probably not the case in Johnson County, where 77.5 percent of the vote went for Mr. Trump in 2016 and where the streets in communities such as Keene were lined with flags for the presidential visit. But, wrote Ms. Coulter (who is not planning a Vuitton boycott), “For many Americans, any brand that chooses to associate itself with the Trump administration is also associating itself with the separation of children from their parents.”
Indeed, any connection with Mr. Trump and his family has been notoriously complicated for brands, which have been the target of very public consumer ire over their ties with the president and his policies.
In 2016, for example, New Balance suffered when it welcomed Mr. Trump’s victory and the end of the Trans-Pacific Partnership. Later, Home Depot was attacked when it was revealed the company’s chairman was contributing to Mr. Trump’s re-election campaign. Most recently, memberships at Equinox and Soul Cycle were canceled after one of their owners, Stephen Ross, hosted a Trump fund-raiser in the Hamptons.
Yet Mr. Arnault was one of the first fashion power players to meet with Mr. Trump after his election, and after the American fashion industry had spoken up vociferously against him, with designers such as Tom Ford and Derek Lam declaring they would not dress the new first lady.
Mr. Arnault first met Mr. Trump, he said, in New York in the 1980s, and when the new president invited him to Trump Tower in January 2017, he went, along with his son Alexandre. That was when he and Mr. Trump first discussed his plans to open a new facility in the United States, and Mr. Trump said when that happened, he would come to the opening.
Mr. Arnault also attended the Trumps’ first state dinner, for President Emmanuel Macron of France — to which Mr. Macron’s wife, Brigitte, wore Louis Vuitton. (Vuitton has become a sort of de facto wardrober to the French first lady.) Melania Trump often chooses Dior, another LVMH brand, for her public appearances.
According to Mr. Burke, Mr. Arnault and Mr. Trump “have regular conversations,” though when asked if they were “friends,” Mr. Arnault looked surprised and said, “No.”
It’s possible, said Charles Day, a leadership adviser with the Boswell Group of psychological management consultants, that Mr. Arnault “is operating in a bubble. He wouldn’t be the first; the more powerful the leader, the stronger the bubble. But more likely is that he wants something from the relationship. Maybe tariff related. And his calculation is that LVMH is so vast that it will be difficult for protesters to target.”
Mr. Arnault is no stranger to controversy, having made his name as “the wolf in the cashmere coat” when he scandalized the French business community with his ruthless acquisitions of hallowed family brands in the 1980s and ’90s.
He laid the bedrock for the modern luxury industry, and has since softened his public image, inviting the public inside the couture ateliers and Champagne estates of his brands during special “Heritage Days” events, and establishing a contemporary art museum in the Bois de Boulogne — the Fondation Louis Vuitton — which will become a gift to the city of Paris in about 45 years. But he also made news last month when he publicly scolded Greta Thunberg, the young climate activist, for “surrendering completely to catastrophism.”
He has also long played in the corridors of power. Aside from the current French president, Mr. Macron, he also was close to the previous president, Nicolas Sarkozy, as well as Tony Blair, the former British prime minister. (Mr. Trump asked Mr. Arnault to “Say hello to Emmanuel” for him, despite the fact “we have our little disputes every once in awhile.”) Yet Mr. Arnault has never been as public about his alignment with Mr. Trump, or that of his most prominent brand, as he was in Texas.
Rewards
Plans for the Texas factory, which is called the Louis Vuitton Rochambeau Ranch after Marshal Jean-Baptiste Donatien de Vimeur, Comte de Rochambeau, a general who was in charge of the French forces in America during the Revolutionary War, were developed in 2017. Originally, the land was known as the Rockin’ Z Ranch.
Vuitton, which is the most valuable luxury brand in the world according to Forbes, is the largest brand in the LVMH stable of more than 70 fashion, beauty, alcohol and hospitality names. LVMH, which had 2018 revenues of 46.8 billion euros (almost $52 billion), has 754 stores and employs approximately 33,000 people in the United States alone. And it invested $1 billion in the country’s economy last year in salaries, taxes and real estate, according to Mr. Arnault.
There are already two Louis Vuitton workshops in California in San Dimas and Irwin (for the last 30 years, approximately half the bags Vuitton sold in the United States have been made in the United States), and the company has had what Mr. Burke called a “special relationship” with the United States since Georges Vuitton, son of Louis, attended the Chicago World’s Fair in 1893. Company executives had been looking for another American base of operations to satisfy local demand in what is their largest market.
They considered North Carolina, but chose to buy the approximately 265 acres in Texas instead, in part because of its central location and, they said, coastal accessibility, and in part because of Texas’s history as a leatherworking center. Part of the deal was a 10-year, 75 percent tax abatement of about $91,900 a year, though Mr. Burke said that was immaterial. The county also agreed to widen the local roads, add a roundabout for Vuitton trucks, put in high-speed internet cables and add streetlights.
In return, Vuitton has promised 1,000 jobs; the company signed President Trump’s “Pledge to America’s Workers,” an education and training initiative, the week before the opening. However, currently there were only 150 people employed in Texas (there are another 760 in California) — though that still makes Vuitton the county’s fourth largest employer. Mr. Burke declined to reveal how much the Texas facility cost, but President Trump announced it in his speech: $50 million (a Vuitton spokesman later confirmed the number).
While all the raw materials, including the leather, the machinery and even the thread, are imported from Europe, the employees are local and the bags produced — which include the Neverfull, Neonoe and Métis, among others — are labeled “Made in U.S.A.”
According to Mr. Burke, the company derives no discernible tax benefits from its American handbag production, thanks to to current low-duty environment, though in the case of a trade war between the United States and Europe, that obviously would change.
In his back and forth with reporters during the factory event, Mr. Trump had addressed the same question a little more excitedly: “I can’t tax him because he moved to the United States,” he said of Mr. Arnault. “He has no tariffs whatsoever because he’s in the United States. So we’re very happy about that. Very happy.”
On the other hand, Mr. Arnault and LVMH were among the forces driving the mythology of “Made in France” as a factor in brand value, embedded in the high prices of their products. If a bag is made in a French way, but in America and by Americans, does that change the commercial proposition?
Reaction
After the news broke about the Texas workshop, some began to express their dismay about both the idea of their Vuitton bags being made in the United States, and the relationship between the president and the brand.
For now, they are being shrugged off the way Mr. Burke shrugged off original complaints about the factory. “For every one person who complains there are 99 in favor,” he said. He was wearing bespoke cowboy boots he had bought a few years ago in El Paso. “You listen to the 99 percent,” he added.
“This is about creating jobs,” he said later. “There’s a commonality of interests that is absolutely in keeping with what our overriding social duties are.”
As for whether the special relationship with the White House would continue, he said, that remained to be seen. But later Energy Secretary Rick Perry, who was part of the presidential party, paused briefly before the ceremony to discuss the workshop and Mr. Arnault’s plans with reporters, and announced, “Bernard is awesome.” (Mr. Perry also confirmed his resignation from the administration.)
Mr. Trump seemed equally keen. In his speech, he had mentioned how much he loved the name of the ranch, and the fact it referenced the French general who fought on the side of future President George Washington. The implication being: History repeats itself.
“I could learn something from you about branding,” the current president said.
