TonThe pace of luxury picked up last week when LVMH co-founder, chairman and chief executive Bernard Arnault – aka “The Wolf in Cashmere” and the world’s richest man – handed over his daughter Delphine Keys to Parisian Christian Dior The fashion house that started the modern fashion industry with New Look in 1947.
The symbolism of the move cannot be ignored: Observers have speculated for months about the succession plans of Europe’s most valuable company, purveyor of fashion, champagne, jewelry and real estate at the heart of the global luxury ecosystem.
Many observers point to the fictional Roy family succession – Based on the Murdoch family. They said the Royce family knew nothing about the Arnault family. Four sons, one daughter, each with their own roles in the empire, vying for control. Now, the eldest daughter, 47, has been named head of Dior, a brand that is significant, if not financially iconic.
Luggage and handbag specialist Louis Vuitton accounts for half of the parent company’s profits, but Dior was the first set Arnault, 73, bought after accepting a tip from a New York taxi driver in 1984 house. So, in terms of family dynasty and affection, it’s at its center.
A former student at the London School of Economics and Arnault’s eldest child, Delphine’s promotion means she is the only child to serve on both the board and executive committee of parent company LVMH, as well as overseeing all product-related activities. .
Delphine was at the helm of Dior during John Galliano’s creative frenzy and acted as an ambassador for the designer on whose shoulders the creatives the Empire depended on.
For at least the next year, this will include Louis Vuitton’s product and marketing blitz, which will focus on collaborations with the 93-year-old Japanese artist Yayoi Kusama, known for polka dots, metallic spheres, pumpkins and “infinity mirror rooms.” — all of which can be found anywhere an LVMH client visits, which is to say within the Instagrammable districts, resorts, events and art destinations that make up the ecology of global superwealth.
According to Arnault, under Delphine’s leadership, “the popularity of Louis Vuitton’s products has increased significantly, allowing the brand to set new sales records on a regular basis. decisive asset for development.”
Delphine’s promotion comes less than a month after her brother Antoine was named chief executive and vice-chairman of the board of Christian Dior SE, the holding company that controls LVMH.
Some interpreted this as the start of a succession battle within the hereditary-oriented company with a market capitalization of $418bn (£340bn). Just as the Murdoch empire is often thought of as a manifestation of one man’s dynamics — without its earthly creator it might fall apart — so too is Arnault, who is 18 years younger than Rupert Murdoch and whose wealth is 10 times that of Rupert Murdoch.
“Nothing is rushed at LVMH,” said Thomas Chauvet, a luxury goods analyst at Citigroup. “The industry’s demand drivers are global economic growth, the wealth effect, global tourism and consumerism with high barriers to entry. Everything is well thought out and because of the family ownership, they probably looked at a lot of candidates and decided she was the most promising Candidates with the ability to run the brand.”
But Arnaut recently tweaked LVMH’s corporate structure to extend his tenure to age 80 or beyond. Last week, he also named Pietro Beccari, who has led Christian Dior Couture since 2018 and quadrupled sales to 8.7 billion euros, as the next chairman and chief executive of Louis Vuitton, replacing a 40-year veteran Michael Burke.
With estimated sales of 21.8 billion euros last year, Burke has turned Louis Vuitton into an economic powerhouse — including a 2017 partnership with Supreme that launched the luxury streetwear category. Louis Vuitton now accounts for more than half of LVMH’s profits.
Crucially, it was Beccari who oversaw the seamless integration of Tiffany, the U.S. jewelry business that Arnault bought two years ago for $16 billion and is run by the youngest in the family, Alexander Arnault, 29. .
The announcement comes as China, whose avid luxury shoppers account for a third of global luxury sales, announced the lifting of zero-covid-19 travel restrictions. Retailers are hoping for that kind of spending when Covid restrictions are briefly lifted in 2020, just as the U.S. consumer, who has kept spending on luxury goods for the past three years, is starting to falter.
“We don’t see a cloud on the horizon for LVMH,” commented Luca Solca of luxury analytics firm Bernstein, which estimates that luxury consumption in China could grow 35 percent this year.
But Delphine’s appointment could be significant in other ways. Women are increasingly ascending to the top of creative roles in fields often dominated by men. “It’s interesting that you hear that Dior is selling out — maybe because female designers understand what women want to wear and what they’re going to buy,” says fashion journalist Amy Odell.
Dior is just one piece of the puzzle in how LVMH became the world’s largest luxury conglomerate, with 75 brands ranging from fashion and jewelry to champagne, hotels and art foundations — as well as high-end dog food.
Part of the reason for LVMH’s success is to lead the development of the luxury industry. Controlling distribution means controlling prices, controlling the shopping experience and, often, controlling the surrounding environment, whether in Paris, London, Shanghai, New York, Singapore or Milan.
“The reality is that the strategy revolves around Louis Vuitton achieving steady growth year after year,” Chauvet said. “They can experiment with jewellery, watches, fragrances or collaborations, and some may become new product categories, but the eternal dogma is neither wholesale nor discount.”
William Middleton, Parisian fashion writer and author of the forthcoming Karl Lagerfeld biography, heaven now, describing the extraordinary growth of the French fashion and luxury conglomerate over the past three decades. Back in the 90s, he said, the industries in New York or Milan were more commercially mature. The formation of LVMH and Kering (PPR), as well as the introduction of talents such as Galliano or Alexander McQueen, or acquisitions such as Gucci, herald a burst of growth.
“In the 90s, Chanel had their offices at 31 Rue Cambon, which was a lovely little building, and Karl worked on the top floor. Now they’ve taken over the entire street, and about 1,200 people work there. Chloé’s offices are at Rue Saint -Upstairs from a store in Honoré. Now it houses two or three archives. Yves Saint Laurent has a two-story headquarters at 5 Avenue Marceau; .
“There is a French word, demesuréewhich means over or over scale,” Middleton added. demesurée is a word to remember.
“The size of these companies and the fashion industry in Paris is huge now, and Bernard Arnott is a big part of that.”