Lvmh: Life Isn't All Champagne And Caviar

French luxury-goods mogul Bernard Arnault is not accustomed to defeat. Since he made a successful run for an ailing textile company that included fashion design house Christian Dior in 1984, Arnault has used surprise takeover tactics and financial acumen to build an $8 billion global powerhouse, selling everything from Louis Vuitton luggage and Christian Dior perfumes to Moet & Chandon champagne and Hennessy cognac. But recently, the 49-year-old president of LVMH Moet Hennessy Louis Vuitton has suffered a surprising series of setbacks.

LVMH, the world's biggest purveyor of luxury goods, has been slammed by problems in Asian markets, where the company generates 45% of its sales. Arnault's $2.6 billion purchase last year of a 61% stake in DFS Group Ltd.--including 180 duty-free boutiques in Asia--is looking ill-timed at best. DFS profits fell 50% in the first six months of 1997, and analysts expect that the chain's poor results will hold down the group's profit growth (chart, page 110).