Racamier Resigns as Louis Vuitton Chief : Luxury goods: Rival Arnault wins control of LVMH, France’s largest public-owned company.

A tortuous boardroom battle for control of France’s fabled LVMH luxury goods group ended today in defeat for prominent French businessman Henry Racamier, who resigned as chairman of LVMH’s Louis Vuitton luggage firm.

Racamier, 77, whose official biography describes him as “a manager and a gentleman,” also stepped down from his post as a director of LVMH Moet Hennessy Louis Vuitton after losing a court battle against his younger rival, Bernard Arnault.

He announced his decision to step down from his posts shortly after an appeals court confirmed Arnault’s 34.5% voting stake in LVMH, giving the 43-year-old tycoon effective control of France’s largest public-owned company.

“We can only bow down before this ruling,” Louis Vuitton said in a statement. The firm, which is 98% owned by LVMH, had asked the court to cancel a 1987 warrants issue with which Arnault won control.

The court decision ended a bitter struggle between the two men for control of LVMH, but the feud may continue with a rival luxury goods empire that Racamier recently created.

Commenting on the court decision, LVMH said in a statement, “We take note with satisfaction.”

LVMH shares, already slumping on news of the court ruling, fell $35.60 to $836 after Racamier’s resignation was announced.

“Racamier’s decision has cast a bit of a cloud on the share and some traders believe it will take time to stabilize the management,” a stockbroker said.

Arnault’s aides had said he would seek Racamier’s dismissal as chairman of Vuitton at a shareholders’ meeting on Monday if the court confirmed his stake.

LVMH was formed from a merger between Louis Vuitton and the champagne and cognac group Moet Hennessy in 1987. Arnault took over as the head of the group in early 1989.

Behind the power struggle was a clash in management styles between the patrician Racamier, who was in steel before marrying into the Vuitton family, and Arnault, who made his name in 1984 dismantling the Boussac textile empire.

Ironically, Arnault was brought into the firm by Racamier as a potential ally because of disagreements on company strategy between the Vuitton family and the Moet Champagne and Hennessy Cognac clans.

It is getting to be a familiar story for old French businesses. Family disputes are also rocking the Paris-based Petrossian caviar empire and France’s largest independent publisher, Gallimard.

The feud within LVMH worsened in February when Racamier announced he was creating a new luxury goods empire. Its first move was to buy the Lanvin fashion and perfume house, in which L’Oreal cosmetics has a strong stake.

LVMH, which describes itself as the world’s biggest luxury goods empire, lost no time in accusing Racamier of unfair competition on the grounds that the LVMH product list includes Christian Dior perfumes and Givenchy and Roc cosmetics.