One of the world’s youngest CEOs has set about refreshing the culture at luggage label Rimowa, bringing in new working practices, new talent and new business ideas.
There’s something endearing about the Köln headquarters of Rimowa, the high-end luggage brand now part of the LVMH luxury-goods empire. If you’ve been to your fair share of industrial estates in second-tier German cities (as your writer certainly has) then you start to recognise the hallmarks: low-slung, cheaply clad administrative buildings; liberal use of corrugated metal; unassuming lobbies welcoming guests into the heart of the German Mittelstand.
You might expect an LVMH company to be a bit brasher. But it seems the behemoth has not changed much here since its acquisition of Rimowa in January 2017 – well, on the outside at least. As the brand’s newish co-CEO Alexandre Arnault admits, many fans will be pleased to hear that. “A lot of people were scared when we made the acquisition,” says the 25-year-old son of Bernard Arnault, the head of LVMH and France’s richest man. “They asked me, ‘Are you going to kill Rimowa and become a supplier of luggage for LVMH?’ That was never the intention. We wanted to build Rimowa as a separate brand.”
Arnault Jr is sitting in a meeting room at the brand’s headquarters, his rangy frame leaning languidly in an office chair. He says “we” when referring to the acquisition but he pushed the deal through. His family bought him his first Rimowa suitcase in New York when he was 18 and doing an internship in the city. That began a love affair with the products that culminated in him approaching the Morszeck family, who then fully owned the brand, and persuading them to consider what he calls “an alliance”.
Rimowa’s integrity and family heritage made it a good match. Founded in 1898, it was originally called Kofferfabrik Paul Morszeck after its founder. Paul’s son Richard Morszeck coined the name Rimowa in the 1930s by taking the first two letters of his names and the German word for trademark, “Warenzeichen”. The brand did well, largely owing to the now-famous aluminium cases it began manufacturing in 1937. It started exporting to Japan in 1979, which has remained a strong market ever since. But Rimowa really garnered attention in the years leading up to the LVMH buyout. In 2015 it reported a 28.2 per cent growth in year-on-year sales; in October 2016 LVMH announced that it would acquire 80 per cent of the firm for €640m.
It was a shrewd buy, not least because the travel sector is booming. “The market is growing like crazy,” says Arnault. “Take China: every year there are 70 million people going from lower to middle class. Those people start to have disposable income and want to discover the world. That’s 70 million potential new customers every year, just out of China.” Airlines continue to make travel cheaper, while “Airbnb is disrupting the hotel industry and [enabling] people to stay in the middle of nowhere for basically no money”.
Arnault also trots out a familiar axiom of consumer-facing business: “Younger generations would like to experience a bit more than owning stuff.” While this might be true, it instinctively feels problematic for LVMH: surely in an ideal world Arnault’s customers are filling their Rimowa suitcases with Louis Vuitton shirts and Bulgari perfumes? “I don’t think our products are directly touched by this,” he says quickly. “For the younger generation there is still a real search for quality and craftsmanship.” If this is the case, it too will stand Rimowa in good stead. Anyone who has used one of the suitcases will know that they are well built and reliable (Arnault is still using his first case from seven years ago).
The HQ might not have changed much since Arnault – who shares the CEO role with Dieter Morszeck, the founder’s grandson – arrived in 2017. But important changes are afoot elsewhere. One of Arnault’s most notable moves was to update the corporate identity, changing the logo and adopting a monogram that references some original 1898 branding (and the twin spires of Köln Cathedral).
Arnault is also keen to refashion the culture of the company, making it “less hierarchical” and introducing flexible working. He displays a firm understanding of modern management lore, insisting that Rimowa be a “no-ego company”, meaning decisions must be made without individual personalities playing a role, and borrowing a phrase from Amazon founder Jeff Bezos: “Disagree and commit”. This maxim means that even if you don’t agree with a decision you must still fully commit if the consensus is against you.
One wonders what the employees of such a traditional German manufacturer must make of Arnault’s leadership style. His management lodestars are seemingly all-American: McKinsey, the US start-up scene and Amazon. Yet the staff are, in some cases, new too. “I wanted to hire younger people and take risks with people by giving them more senior positions than they would have had in other organisations for their age.” That thinking makes sense from one of the youngest chief executives in the world.
When the discussion turns to the future of Rimowa it’s also obvious that Arnault already has enough ideas to keep his colleagues and the production line busy for decades. A rumoured collaboration with US streetwear label Off White aside, he speaks about teaming up with artists to make stickers for his cases and also about manufacturing 100ml containers for people travelling with liquids.
He talks about eventually transforming Rimowa into a “one-stop shop for travel”. Does this mean Rimowa travel guides, perhaps? “I’m not sure but we want to have a role to play in the travel-recommendation business.” What about a Rimowa hotel, like the ones that other fashion brands have launched in recent years? “I think it’s too early for us,” he says. “I do believe that we have a legitimacy on that front and it’s definitely something we could consider.” You heard it here first. Pack your bags – or rather, your aluminium cases.
What time do you like to be at your desk?
Between 07.30 and 08.00.
Where is the best place to prepare for leadership: business school or on the job?
On the job, 100 per cent. I didn’t do an MBA and there’s nothing that I would recommend more than being in the field.
Describe your management style.
Open, collaborative, demanding.
Are tough decisions best taken by a single person or by a group?
A group. Even though there is one person that needs to make a decision at the end.
Would you rather be liked or respected?
Respected. If you are respected, people look up to you.
Do you read management books?
I used to but I don’t have time now. Sometimes they give you advice from situations that you will never find yourself in, so you try to apply stuff that’s not applicable.
- What would your key management advice be?
Listen to your teams instead of staying closed in your office.
Who do you go to for advice and guidance?
Many people. People in the group, people outside the group, other young managers who are friends of mine and have experience in the same discovery of organisations and scale.
Is it OK for employees to disagree with you?
One hundred per cent. I find it stranger if they don’t.
Have you ever made a mistake you wish you could take back?
Yes, people mistakes. Hiring someone too fast because I had a need, then realising that I’d made a mistake. And then not correcting that mistake quick enough.