MILAN – Call a 400 billion euro giant “a family business” it’s not for everyone. Especially if this giant, and we’re talking about LVMH is capable of selling bags and perfumes around the world for a value that exceeds all the Camembert and wine produced by France’s famous agricultural sector.
The luxury conglomerate – which includes brands ranging from fashion label Louis Vuitton to Moet & Chandon champagne – accounted for 4% of all French exports last year worth 23.5 billion of its goods. Thus beating the contribution of the entire agricultural sector, it ‘stops’ at 3.2%.
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edited by the Economics editorial team
Behind this recent and curious statistic reported by Financial Times there is all the greatness of the creature of Bernard Arnault. Which, as we said at the beginning, considers it “a family affair”. So what, he wonders l’Economist, what will happen to this business when its founder passes on?
As happens in Italy for Armani, the question regarding succession in luxury companies is always current. Last October, a review of the governance of the Arnault family emerged in order to define its mechanisms until beyond the middle of the century. In particular, if it was previously expected that LVMH would move to a directorate under the umbrella of the Belgian Protectinvest foundation, with the 25th birthday of Bernard’s youngest son, Jean, who deals with watches in the group, the move was made to a different setup. Control of almost 64% of LVMH’s voting rights is expected to pass to Financière Agache, with the five Arnault brothers (sons of the founder) as shareholders and the impossibility of selling shares until 2052. Furthermore, providing Bernard with powers of unlimited benefits up to the age of 95.
In fact, the financial newspaper notes, that it is a family affair is true to the extent that all five children are involved in LVMH. Last Thursday Alexandre and Frèdèric, with an almost unanimous vote of the assembly, joined the group’s board of directorswhere they will sit next to their older brothers, Delphine and Antoine, already present on the board. For now there is only one place left for the youngest, Jean. “He has time, he is young”, said Bernard, who is 79 years old, about him.
It is true that the founder has already guaranteed himself the possibility of remaining in the saddle by raising the age limit set for the CEO. But for l’Economist the moves on the board and also in other important delegations demonstrate that something is moving under the leadership of the “wolf in cashmere”. Some recent passages: it dates back to last year the rise of the eldest daughter Delphine to the direction of Christian Diorfresh from a sparkling season in sales under the management of Pietro Beccari, who in turn took over the helm of Louis Vuitton. Antoine he is now CEO of the family holding company that controls LVMH. Alexandre it is in fact number two of Tiffany & Co’s jewels, while as seen Frédéric and Jean look to the watch sector.
What could happen then? The analyst of Hsbc Erwan Rambourg practices three possible succession scenarios. Number one sees Delphine, thanks to his career between Dior and Vuitton since the beginning of the new millennium, at the top. Scenario number two: Alexandre on the throne, the son capable of convincing his father to buy German Rimowa suitcases and drive them safely. The relaunch of Tiffany’s image, to which she is dedicating herself while also seeking partnerships from Beyoncé to Jay-Z, is a good test. Third scenario: a Solomonic division of the group into five divisions, one for each son.
The conclusion is that, for the moment, which of the scenarios is in Bernard Arnault’s mind is still unknown. What is certain is that he will leave a leader capable of closing the first quarter with revenues of almost 21 billion euros, a drop of 2% but after a stellar 2023. The difficult and enviable position of the heirs of such greatness.
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– 2024-04-21 10:30:21
