Welcome to the World of Orcofi
Orcofi Company History
French fashion house Orcofi, originally founded by Louis Vuitton family patriarch/former Chairman/CEO of LVMH Louis Vuitton-Moet Hennessey Henry Racamier in the late 1800’s , earned an international reputation for luxury goods products (haute couture, ready-to-wear, handbags, perfumery, and cosmetics). Early in its history, the original holding company joined the French banking group Paribas and the French cosmetics giant L’Oréal in buying the Lanvin fashion house.
Between 1989-1991, Orcofi established an impressive portfolio. The company acquired leather conglomerate Andrelux Industries (Bohata et Cie, Lorenzo, Soco, Upla, and Le Tanneur), French trunk maker Moynat, a heritage company founded in 1849, the luxury grocer Hédiard, Cristalleries Daum, Philippe Model (the French fashion shoe and accessories designer), signature ready-to-wear Ines de la Fressange and Paris’ oldest couture house, Lanvin. Racamier later sold Orcofi to French global insurance powerhouse AXA S.A.
The started another series of acquisitions. L’Oréal purchased 50% of the House of Lanvin from Lanvin in 1996. Lanvin was later acquired from L’Oreal by Taiwanese media magnate Shaw-Lan Wang in 2001. Gordon-Choisy, one of the world’s most prominent tanneries specialized in exotic leathers, was initially sold to LVMH and then to Hermes International. Luxembourg-based luxury holding company Luvanis SA, owners of Vionnet and Mainbocher, bought the rights to Moynat in 2009. In a twist of irony, Groupe Arnault, LVMH’s CEO Bernard Arnault’s holding company bought Moynat in 2010, relaunching the brand in 2011.
More consolidation followed. Qatar Luxury Group, owners of QELA, announced the acquisition of a controlling share of the French leather goods company Le Tanneur & Cie in 2011. Le Tanneur, founded in 1898, and Soco, had been listed on Euronext since 2000, the same year it signed a licensing agreement with Michael Kors and Celine. Cristalleries Daum is now part of Financiere Saint-Germain, parent company of Lalique and Haviland Porcelain Works.
In 2013, Grand Metropolitan acquired Orcofi and is reassembling a collection of luxury brands.
Henry Racamier, who married a descendant of Louis Vuitton and built a family-owned leather goods company into one of the world’s largest luxury goods groups, died while traveling in Sardinia. He was 90. The cause was a heart attack, according to the Opéra National de Paris, which Mr. Racamier, a well-known patron of music and the arts, supported almost his entire life.
Mr. Racamier made a fortune in the steel industry, having founded Stinox, before he was asked at age 65 by the family of his wife, Odile Vuitton, the great-granddaughter of Louis Vuitton, to run the family’s leather goods business.
In 13 years, he expanded it through growth and acquisitions into a world-renowned, billion-dollar luxury goods conglomerate, LVMH Moët Hennessy Louis Vuitton. Yet in a bitter battle with the current chairman, Bernard Arnault, Mr. Racamier was ultimately stripped of power and ousted from the board.
While running Vuitton, he started the yachting races that bear the company’s name; as founder of the Louis Vuitton Foundation for Opera, Music and the Arts, he became a major benefactor of musicians and museums around the world.
Henry Marcel Racamier was born June 25, 1912, in Pont-de-Roide, in the Doubs region of mountainous eastern France, the son of an industrialist. After acquiring a business degree in Paris, in 1949 he founded Stinox, a small but highly profitable steel trading company. When his father-in-law, Gaston Vuitton, died in 1970, the family was divided about how to run Vuitton. Mr. Racamier, who retired from steel in 1977, was asked to take over.
Vuitton had been synonymous with prestige almost since it was founded in 1854 by Louis Vuitton, who was imperial layetier, or clothes packer, for Empress Eugénie, the wife of Napoleon III. For more than a century, Vuitton was magical. Yet when Mr. Racamier took over, the company appeared mired in the 19th century. Vuitton had just two stores, one in Paris and one in Nice, and had annual revenue of about $14 million.
Bringing management skills acquired in the steel business, Mr. Racamier modernized the way Vuitton made and marketed its leather goods; more important, he tapped the immense Asian market.
On one occasion a reporter asked Henry Racamier if his shops ever thought of having a sale. “A sale?” Mr. Racamier examined the word as though an impropriety had been uttered. “No,” he said finally. On the contrary, his policy was to make the firm’s goods ever more alluring by increasing prices, not reducing them. He was in the business of selling luxury items, and his customers expected to pay very high prices; otherwise they would be worried that they were not being offered products of the finest quality.
Mr. Racamier had taken over the leather goods firm of Louis Vuitton in 1977 when its business was slipping. Fewer and fewer people wanted leather luggage. The new generation of travellers was buying lightweight luggage that did not need the assistance of a porter; best give leather back to the cows. Mr. Racamier looked beyond Vuitton’s traditional European market to Asia. In the 1970s the “tiger” economies were producing a middle class gaining a taste for luxuries. A Vuitton steamer trunk might seem in Paris to belong to a bygone age, as indeed it did, but to a newly rich family in Seoul or Taipei it carried cachet. Did you know that a trunk like this was made for the pasha of Egypt? Fancy that. How much did you say?
Trunks were just a taster of the catalogue of wares rapidly being expanded by Mr. Racamier: handbags, purses, belts, wallets. In 1977 Vuitton had two shops, one in Paris, the other in Nice. By 1990 Mr. Racamier had built the business into more than 130 Vuitton shops worldwide, set up new factories to keep them supplied, and trained members of staff to be as polite and knowledgeable as those in Paris. One measure of a shop’s success is its yearly sales per square foot. That of, say, an average jewellery shop in a prosperous street in a western country might be about $750. The Vuitton shops regularly sold more than twice that, and sometimes much more. Mr. Racamier seemed to have turned leather into gold.
When he took over Vuitton Mr. Racamier was 65 and thinking of retiring. He had spent his adult life in the steel industry, much of it building up a steel trading company called Stinox. It had prospered and Mr. Racamier was comfortably off. He was married to Odile Vuitton, the great-granddaughter of Louis Vuitton, who had started out as a clothes-packer for Empress Eugénie, wife of Napoleon III, founding his own luggage business in 1854. The business had stayed in the family, eventually passing to Odile’s father, who had run it until his death in 1970.
Mr. Racamier was at first reluctant to take over the family firm. He was planning other diversions, mainly music. But he was prevailed on by his mother-in-law to “take a look at the books; see what can be done”. The books, Mr. Racamier recalled, “looked very dodgy”. The firm’s assets included a factory of antique character with a staff to match.
Its main asset, Mr. Racamier decided, was its name. In its heyday the firm had been an innovator. Its steamer trunks with their flat tops were designed to stack neatly into cargo holds and rapidly replaced domed trunks, more suited to the backs of horse-drawn carriages. The famous would get Vuitton to make luggage personal to their needs: Douglas Fairbanks, an early Hollywood star, wanted a special compartment for his toiletries; Leopold Stokowski’s trunk opened into a desk with a drawer for musical scores; an Indian maharajah’s trunk had a container to hold water to make tea. Louis Vuitton and his successors had catered for people to whom money was merely a means of getting the best. Mr. Racamier sought to satisfy the needs of his new Asian customers in the same joyous spirit.
He was among the first businessmen in the expansive 1980s to recognise the value of the logo: that however well made the article, it was the initials LV that created its extra value. But he differed from other manufacturers who, he said, flaunted their names. The logo had to be discreet, creating a feeling of understated quality. This was especially important for a firm such as Vuitton, which had moved into the luxury mass market. The firm sought to convey the impression that its clientele essentially remained the famous.
Henry Racamier, the husband of Gaston Vuitton’s daughter Odile, took over management of the company in 1977. Racamier had founded Stinox, a steel manufacturing business, after the Second World War and had sold it at a huge profit before coming to Louis Vuitton. Under Racamier, the company’s sales soared from $20 million in 1977 to nearly $1 billion in 1987. Racamier recognized that the major profits were in retail and that to succeed on an international level, Louis Vuitton had to expand its presence in stores and distributors in France. As a result, Louis Vuitton stores were opened all over the world between 1977 and 1987, and Asia became the company’s principal export market. Moreover, product diversification ensued, and in 1984, at the urging of financial director Joseph Lafont, the company sold stock to the public through exchanges in Paris and New York.
The 1980s were profitable years for Louis Vuitton, as the Vuitton name was prodigiously promoted. In 1983, Louis Vuitton became the sponsor of the America’s Cup preliminaries. Three years later, the company created the Louis Vuitton Foundation for opera and music. Also in 1986, the central Paris store moved from avenue Marceau to the posh avenue Montaigne. Production at the factory at Asnières incorporated the use of lasers and other modern technology during this time, and a distribution center was opened at Cergy-Pontoise, north of Paris. The company allocated two percent of annual sales revenue to the unending battle against counterfeiters.
Under Racamier, Louis Vuitton began to acquire companies with a reputation for high quality, purchasing interests in the couturier Givenchy and the champagne house Veuve Cliquot. Louis Vuitton’s takeover philosophy was personal, courteous, and discreet, rather than systematically aggressive.
In 1987 Racamier formed an alliance with another family firm, Möet Hennessy, producers of champagne and brandy. The resulting group, known as LVMH, would, he believed, be strong enough to see off any predators.
Yet success led to fear of outside takeover. So in 1987, after long and discreet discussions, Mr. Racamier announced the merger of Vuitton with Moët-Hennessy, the venerable Paris-based Champagne and Cognac producer, and renamed the combination LVMH Moët Hennessy Louis Vuitton. The idea was that the combined group would be too large for a hostile raider. Instead, the siege came from within.
In June 1987, a $4 billion merger was effected between Louis Vuitton with Möet-Hennessy, which allowed Louis Vuitton to expand its investments in the luxury business, while saving Möet-Hennessy from the threat of takeover. Moreover, the merger respected the autonomy of each company over its own management and subsidiaries. As Möet-Hennessy was three times the size of Louis Vuitton, its president, Alain Chevalier, was named chairperson of the new holding company, Möet-Hennessy Louis Vuitton (LVMH), and Racamier became executive vice-president. Massive disagreements and feuding followed, however, as management at Louis Vuitton believed that Möet-Hennessy was trying to absorb its operations. The 60 percent ownership that Racamier and the Vuitton family had held in Louis Vuitton became a mere 17 percent share of LVMH.
After several disputes and legal battles between Racamier and Chevalier over the running of the conglomerate, Racamier invited the young property developer and financial engineer Bernard Arnault to acquire stock in the company. Hoping to consolidate his position within LVMH with the help of Arnault, Racamier soon saw, however, that Arnault had ambitions of his own. With the help of the French investment bank Lazard Frères and the British liquor giant Guinness plc, Arnault secured a 45 percent controlling interest of LVMH stock for himself.
An 18-month legal battle ensued between Racamier and Arnault, after Chevalier had stepped down. Despite Louis Vuitton’s strong performance, accounting for 32 percent of LVMH sales, Racamier could not hold onto his stake in LVMH against Arnault, who had the support of the Möet and Hennessy families. The courts eventually favored Arnault, and Racamier stepped down to create another luxury goods conglomerate, Orcofi, with the backing of such French investors as Paribas and L’Oréal. Arnault weeded out Vuitton’s top executives and began to bring together his fragmented luxury empire.
Guinness plc had originally been brought into LVMH by Alain Chevalier, who had hoped to find an ally in his feuding with Racamier, in a deal to exchange one-fifth of the two companies’ equity capital. Guinness then united with Arnault to control LVMH. In 1990, when Racamier left, Arnault increased his interest in Guinness from 12 to 24 percent, fueling rumors that Guinness would be his next target. Takeover speculation was also encouraged by the fact that Guinness directors had little power in LVMH, while Arnault had by far the largest shareholder vote in Guinness. However, Arnault’s percentage in Guinness was proportionately equal to the 24 percent Guinness controlled of LVMH. In the early 1990s, Arnault controlled the world’s largest luxury empire, with about $5 billion in worldwide sales. His holdings were structured as a pyramid of interconnected companies with control of LVMH central to his power, as it had a market capitalization of $10 billion in 1990.
In 1988, Mr. Racamier invited a relatively unknown French businessman, Bernard Arnault, then 39, to invest in LVMH, hoping to gain him as an ally in a management struggle. But after joining LVMH, Mr. Arnault turned against Mr. Racamier and after a two-year battle for control ousted him from the board. By the time of his departure, LVMH had more than 130 stores worldwide and annual revenue of $1.2 billion; Asia accounted for almost 40 percent.
After leaving LVMH, Mr. Racamier used a family holding company, Orcofi, to join the French banking group Paribas and the French cosmetics giant L’Oréal in buying the Lanvin fashion house. Many thought he would try to build a new luxury group to rival LVMH.
Between 1989 and 1991, Orcofi established an impressive portfolio in the luxury sector and particularly they leather bought Andrelux (Bohata, Lorenzo, Soco, Upla, Le Tanneur), the trunk-maker history Moynat, the grocer luxury Hédiard, the Cristalleries Daum , the young signature ready-to-wear Ines de la Fressange and fashion house Lanvin.
Experiencing financial difficulties, Orcofi sold more of its subsidiaries (including Lanvin to L’Oreal in October 1995) before being acquired by AXA in 1996 and dismantled.
The French insurer Axa S.A. confirmed that it was in talks to acquire Orcofi, a company headed by Henri Racamier, the former chairman of LVMH Moet Hennessy-Louis Vuitton S.A.; Orcofi comprises various businesses owned by the Vuitton family. According to the weekly financial magazine Le Nouvel Economiste, Axa will acquire a shell company whose only assets will be 3 billion francs ($600 million) in cash, resulting from the sale of LVMH stock.
Before being sold to Axa, Orcofi sold its 35 percent stake in Lanvin to L’Oreal S.A., while members of the Vuitton family acquired the Andrelux luxury luggage businesses.