Arnaud Lagardère: Dad, I shrunk the empire

Arnaud Lagardère, heir of the Lagardère business empire, has been bailed out by the French establishment – again. But this time he is determined to prove his mettle.

Twenty years ago, LVMH founder Bernard Arnault sat down for dinner with his old friend, Jean-Luc Lagardère, at the Paris Polo Club after their regular game of tennis, says the Financial Times. They were joined by Lagardère’s son and heir, Arnaud. At the time, Lagardère was the more celebrated of the two business leaders – having built one of France’s great industrial empires, with interests ranging from aerospace to publishing. But he already had an eye on his own mortality. “If anything happens to me,” he told Arnault, “you must look after Arnaud.” Three years later, he died.

Fast-forward two decades, and the luxury tycoon – now the richest man in Europe – appears to be honouring his pledge. Last week, Arnault announced he would buy 25% of Arnaud Lagardère’s personal holding company, through which he controls the publicly traded Lagardère Group. The deal saves Lagardère junior “from an embarrassing reckoning with his French creditors”. Perhaps more importantly, it also gives him “a powerful ally” in his “long-running battle” with Amber Capital – the London-based hedge fund that has been agitating to overhaul the group, now mainly a media empire whose assets include the publishing house Hachette, a chain of newsagents, and several high-profile magazine titles including Paris Match and Elle.

“French tycoons like to scratch each others’ backs,” says Bloomberg. Especially, it seems, when the threat is “hedge-fund humiliation”. Arnault is actually the third Gallic billionaire to ride to the rescue of the Lagardère’s “indebted heir” in his time of trouble. Vive la French establishment! Arnaud Lagardère, now 59, clearly holds a special place. But he has also attracted “plenty of scorn for both his management style and the performance of the business”, says the FT. Considered something of a playboy, “Lagardère spends several months of the year in Florida and once skipped a board meeting to attend the Roland-Garros tennis tournament in Paris”. During his tenure, he has refocused the group away from its industrial heritage to concentrate on the media side of the business – with mixed success. In 2018, the left-leaning newspaper Libération splashed him all over the front page under the headline Papa, j’ai rétréci l’empire (“Dad, I shrunk the empire”). 

A reluctant chief executive?

Lagardère is obviously no dunce: he took a masters in economics before joining the family firm in 1986, and spent his apprenticeship as the dauphin working in different roles across the group. Nonetheless, his extracurricular activities with the opposite sex have long been the subject of public fascination, and many have concluded that Lagardère is “a reluctant chief executive”. Lagardère threatened to sue one French paper that “questioned his dedication”, but the press continued to have a ball. 

“Maybe I’m an atypical boss, so what?” a defiant Lagardère told the business paper, Les Echos. “Being happy in one’s private life is a source of stability for a chief executive.” Well, not necessarily. Now financially shored up, the enfant terrible of French business intends to make Lagardère “a global leader” in book publishing and travel retail, notes the FT. “I have spent a lot of time defending myself and the company, now I want to move forward,” he says. “If I’m lucky, I have 15 or 20 years left ... to strengthen my family’s company.” Le tout-Paris is watching. 

Recommended

I wish I knew what contagion was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what contagion was, but I’m too embarrassed to ask

Most of us probably know what “contagion” is in a biological sense. But it also crops up in financial markets. Here's what it means.
21 Sep 2021
Why is the UK short of CO2 and what does it mean for you?
UK Economy

Why is the UK short of CO2 and what does it mean for you?

The UK is experiencing a carbon dioxide shortage that could lead to empty shelves in supermarkets. Saloni Sardana explains what’s going on and how it …
21 Sep 2021
What to invest in to beat soaring energy prices
Investment strategy

What to invest in to beat soaring energy prices

As gas and electricity prices hit the roof, John Stepek explains how to invest to offset higher energy bills.
21 Sep 2021
Are Spacs just for suckers?
Investment strategy

Are Spacs just for suckers?

This year has seen a big boom in activity by special purpose acquisition companies (Spacs) in the US and the Spac craze is spreading to other markets…
21 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
How to stop recurring subscriptions becoming a drain on your money
Personal finance

How to stop recurring subscriptions becoming a drain on your money

Tracking and pruning subscriptions isn’t as easy as it sounds. Here's how to take charge.
14 Sep 2021