One thing that made the confrontation between me and my co-manager, Francois Beaufume, worse was the breakdown of stakeholdings in the company. I held 40%, while Xavier de Castella and Atsuko Kondo each held 8%.
As long as the three of us were united, our majority was unassailable. Unfortunately, however, Xavier died from an illness and Kondo was laid low by a stroke.
In his will, Xavier bequeathed his entire stake to me. But the whereabouts of Kondo's shares were unknown. Francois fanned the anxiety over this. It seems he had aspirations of increasing his own stake.
There are no "ifs" in history. But had Xavier and I not invested so much in building our home, these problems would likely not have occurred. To raise funds, the two of us sold nearly 30% of our combined stake to a bank. That meant that in exchange for pursuing our "dream," we embraced the risk of being bought out.
The company was split in two -- the Francois camp and the Kenzo camp
Only once did Francoise sound me out about an amicable settlement. But I saw red and absolutely refused to listen to him.
Strange things were starting to happen.
It was in May 1993. When I signed the agreement to sell my share to LVMH Moet Hennessy Louis Vuitton, I approached their leader, Bernard Arnault, with the following: "I want to incorporate into the agreement a provision that my co-manager will be dismissed."
But this was rejected. "It's not moral to write an individual's name into a contract. How about a gentleman's agreement?"
Carelessly, I said "That makes sense" and agreed. For some reason, the attorney and management consultant I had hired offered no objections.
More curious was the fact that the value of the sale was some 20% less than I had anticipated. Having said that, I figured that once I signed, we would be able to start over with a new order. I was ready to let little things slide.
Shocking turn of events
After signing, I invited my attorney and management consultant to lunch to thank them for their labors. But no sooner had they entered the restaurant than they bluntly pressed me to give them a check for their commission before dining. I was stunned. This was a shock because I had long believed they were my friends.
I was being swallowed up by an enormous force I could not comprehend.
Then Francois's counterattack began. He had secretly been conducting a signature campaign within the company to retain his position and had obtained the assent of a majority. My allies were the employees in the studio. The company was split in two -- the Francois camp and the Kenzo camp.
The day of Francois's planned retirement came in late June. Around 100 middle managers and higher officials gathered at the main store, which faced the Place des Victoires.
"After all my contributions to this company, I'm now being banished. What kind of treatment is this?" Francois went on and on like this in a speech fiercely critical of me.
In the afternoon of the same day LVMH's leader, Arnault, summoned me by phone. At his office near the Arc de Triomphe, he broached the subject thus: "It's going to be hard to let Francois go. Apparently, more than half of the employees want him to stay."
I couldn't believe my ears. "This is a clear breach of the contract. What about our gentleman's agreement?"
"A gentleman's agreement is a gentleman's agreement. But I cannot ignore the current state of affairs. I'd like you two to work together."
Thinking calmly about it now, I can definitely understand Arnault's position. But I was psychologically cornered. Enraged, I slammed the door shut as hard as I could and left without saying a word. And then in anger I tendered my resignation to Arnault.
Kenzo Takada is a fashion designer known for his eponymous label Kenzo, which he left in 1999.