LVMH finds making Louis Vuitton bags messy in Texas

Six years ago, LVMH billionaire CEO Bernard Arnault and President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands.

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But since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees told Reuters. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, according to three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant's problems — which haven't previously been reported — highlight the challenges for LVMH as it attempts to build its production footprint in the US to avoid Trump's threatened tariffs on European-made goods. “The ramp-up was harder than we thought it would be, that's true,” Ludovic Pauchard, Louis Vuitton’s industrial director, said in an interview on Friday in response to detailed questions about Reuters findings.

The Texas site, situated on a 250-acre ranch, has struggled due to a lack of skilled leather workers able to produce at the brand’s quality standards, the three former workers told Reuters. “It took them years to start making the simple pockets of the Neverfull handbag,” one source familiar with operations at the plant said, referring to the classic Louis Vuitton shoulder tote bag. Errors made during the cutting, preparation and assembly process led to the waste of as many as 40% of the leather hides, said one former employee with detailed knowledge of the factory's performance. Industry-wide, typical waste rates for leather goods are generally 20%, a senior industry source said.