Posh handbags at dawn: succession struggle rages for luxury giant LVMH | Bernard Arnault

T.Last week, LVMH co-founder, chairman and CEO Bernard Arnault, dubbed the “Wolf of Cashmere” and the richest man in the world, gave his daughter Delphine the keys to Parisian Christian Dior. The march of luxury quickened its pace when the The couture house that kick-started the modern fashion industry with the New Look in 1947.

The symbolism of this movement could not be overlooked. I’ve been speculating about a company’s succession plan.

Many observers pointed to the fictional Roy family Inheritance – Based on the Murdoch clan. The Roy family, they said, had nothing in the Arnaud family. Four sons and his one daughter each play a role in the empire and vie for control. And now, the 47-year-old eldest daughter has been placed at the top of Dior, a symbolically if not financially important brand.

Luggage and handbag specialist Louis Vuitton makes up half of the parent company’s profits, but Dior owns the first house the 73-year-old Arnaud bought in 1984 after a tip from a New York taxi driver. It was, therefore, at the heart of it, from a dynastic and emotional point of view of the family.

A former student at the London School of Economics and the oldest of Arnault’s children, Delphine’s promotion means she is the only child to serve on both the Board and Executive Committee of parent company LVMH. To do. She will be responsible for overseeing all product related activities.

It was Delphine who steered Dior during the creative fervor of John Galliano and acted as envoy of the designers whose empire relies on its creative shoulder.

At least next year will include Louis Vuitton’s product and marketing blitz centered around polka dots, metallic orbs, pumpkins and a collaboration with 93-year-old Japanese artist Yayoi Kusama, known for her ‘Infinity Mirror Room’. . – Anywhere there are LVMH customers, that is, everything could pop up within the Instagrammable districts, resorts, activities and arts destinations that make up the ecology of the world’s ultra-rich.

People shop at Louis Vuitton in Hong Kong. Photo: SOPA Images/LightRocket/Getty Images

Under Delphine’s leadership, Arnault said: Her keen insight and unparalleled experience will be a decisive asset in driving Christian Dior’s continued development. “

Delphine’s promotion comes less than a month after her brother Antoine was appointed chief executive officer and vice chairman of the board of Christian Dior SE, the holding company that controls LVMH.

Some interpreted this as the beginning of a succession war within a $418 billion (£340 billion) hereditary company. He is 18 years younger than Rupert Murdoch and 10 times richer than him, as the Murdoch empire is often thought to be the manifestation of one man’s impulses and could collapse without its earthly creator. The same goes for Arnaud.

“At LVMH there is no rush,” said Thomas Chauvet, luxury analyst at Citi. Because of the family ownership, everything has been well thought out and probably looked at many candidates and decided she was the most competent to run the brand.

However, Arnaut recently wiggled LVMH’s corporate structure and extended his tenure until he was over 80. Last week, he also named Pietro Beccari, who has led Christian Dior Couture since 2018 and quadrupled sales to €8.7 billion, as Louis Vuitton’s next chairman and chief executive officer, a 40-year veteran. was transferred to succeed Michael Burke.

With an estimated turnover of €21.8 billion last year, Burke has turned Louis Vuitton into an economic powerhouse. This includes collaborating with Supreme in 2017 to launch the Luxury Streetwear category. Louis Vuitton now accounts for more than half of LVMH’s profits.

Importantly, Beccari is overseeing the seamless integration of Tiffany & Co., the US jewelery business that Arnault acquired two years ago for $16 billion.

The announcement comes as China, where avid luxury consumers account for one-third of global luxury sales, announced it would lift Covid-free travel restrictions. The retailer wants spending like he did in 2020 when Covid restrictions were temporarily lifted. This comes at a time when the US consumer, who has spent the past three years on extravagant spending, is starting to wane.

“There are no clouds on the horizon for LVMH,” commented Luca Sorca of luxury analyst firm Bernstein, estimating that China’s luxury spending could rise by 35% this year.

Louis Vuitton luggage is the driving force behind the company's destiny.
Louis Vuitton luggage is the driving force behind the company’s destiny. Photo: John Magenborg/Alamy

But Delphine’s appointment may be significant in other ways. Women are increasingly rising to the top of creative roles in fields typically dominated by men. “Anecdotally, I hear Dior flying off the shelves, probably because women designers know what women want to wear and what they want to buy,” she says. fashion her journalist Amy Odell says.

Dior is one piece in the puzzle of how LVMH became the world’s largest luxury goods conglomerate, with 75 labels ranging from fashion and jewellery, to champagne, hotels, art foundations and fine dog food. It’s just

Part of LVMH’s success has been leading the way in the development of the luxury goods industry. Controlling distribution means controlling prices, controlling the shopping experience, and often times, controlling the surrounding environment, whether in Paris, London, Shanghai, New York, Singapore or Milan. I mean

“The reality is that the strategy revolves around steady growth for Louis Vuitton every year,” says Chauvet. “They can experiment with jewellery, watches, fragrances, collaborations, etc., and some may become new product categories, but the enduring static dogma is not wholesale or discounts.

Paris-based fashion writer and Karl Lagerfeld biographer William Middleton Paradise Nowdescribes the extraordinary growth of French fashion and luxury conglomerates over the past three decades. In the 90s, he says, the industry in New York and Milan was more commercially sophisticated. The founding of LVMH and Kering (PPR), the importation of talent such as Galliano and Alexander his McQueen, or the purchase of maisons like Gucci portended explosive growth.

“In the 90s, Chanel had an office at 31 Rue Cambon, a lovely little building where Karl worked on the top floor. Now they occupy an entire street and probably 1,200 people work there. Chloé had offices above the shops on rue Saint-Honoré, now has two or three buildings for archives, and Yves Saint Laurent had a two-story headquarters at 5 rue Marceau. Now a 140,000-square-foot complex, it was the Abbey of Pentemon.

“There is a word called French. disproportionate, which means over or off scale,” adds Middleton. As the luxury industry prepares for autumn/winter ready-to-wear presentations, luxury marketing in exotic locations, celebrities and handbags, disproportionate A word to keep in mind.

“The scale of these companies, the Parisian fashion business, is now very large, and Bernard Arnault is a big part of it.”

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