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Luxury relying on banking and finance (19th-21st centuries)

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  • Hubert BONIN

Abstract

Luxury-specific production systems have expanded through upstream-downstream integration, from commodities (silk, precious metals, etc.) to processing industries and luxury houses themselves. Banks financed companies, trade, foreign exchange and flows of means of payment. Starting in the 1980s, business bankers supported companies building a capitalism of luxury firms: they helped them to integrate the game of financial markets. For managers of companies in the luxury sector, the challenge has always been to create strong self-financing capacities in order to be able to distribute dividends ensuring the loyalty of family shareholders, finance investments (workshops, shop networks), and contain indebtedness. When tensions were encountered, the dependence on bankers and investors, in the event of a stock exchange listing, often led to the takeover of control by leading groups.

Suggested Citation

  • Hubert BONIN, 2019. "Luxury relying on banking and finance (19th-21st centuries)," Cahiers du GREThA (2007-2019) 2019-06, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2019-06
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2019/2019-06.pdf
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    More about this item

    Keywords

    Luxury; family business; Bernard Arnault; François Pinault; investment banking; cash-flow; capitalistic restructurings;
    All these keywords.

    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • N80 - Economic History - - Micro-Business History - - - General, International, or Comparative
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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