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LVMH Succession Intrigue
Bernard Arnault has begun clearing the executive decks for the next generation—Delphine, Antoine, Alexandre, Frédéric, and Jean—amid growing anticipation of another sale and fresh acquisition targets as the fashion world braces for change.
Among the more obvious portents of the coming transformation is that C.E.O. and chairman Bernard Arnault has begun replacing executives within his inner circle with people who could become his children’s closest advisors. Photo: Denis Charlet/AFP/Getty Images
October 7, 2024
In the days since I returned from Paris Fashion Week, virtually all my calls and conversations have centered on LVMH, from potential designer changes to speculative M&A moves to executive shuffle tea-leaf reading. Most of the conjecture is utter nonsense, of course, and yet the totality of it underscores how the industry has been incorrectly, and predictably, focused on superficial amusements (
i.e., the designer speculation and innuendo) rather than the structural changes behind it all.
Among the more obvious portents of the coming transformation is that C.E.O. and chairman
Bernard Arnault has begun replacing executives within his inner circle with people who could become his children’s closest advisors.
Toni Belloni (former group managing director, Italian right hand),
Chris de Lapuente (former head of group that includes Sephora), and
Jean-Jacques Guiony (C.F.O.) are all
basically out;
Sidney Toledano (former Dior C.E.O. and Fashion Group head) is
halfway out. Meanwhile, current heir apparent
Delphine Arnault (Dior),
Pietro Beccari (Louis Vuitton),
Pierre-Emmanuel Angeloglou (Fashion Group deputy), and
Cecile Cabanis (next C.F.O.) are still
in, with more appointments ahead. Arnault may have no plans to retire, himself, but he appears to be unsparing about colleagues nearing retirement age. (Former Louis Vuitton C.E.O.-cum-Fashion Group head
Michael Burke, by the way, is still around and active in the business—and under 70—so perhaps something else is in store for him.)
As I mentioned last week, I suspect there will be another shake-up soon. Toledano, who returned to help run the fashion group after Burke stepped back, won’t stay in that position forever. I’ve also been told to keep an eye on C.E.O. changes at the small-but-impactful brands owned by the group.
These maneuvers make the org chart whereabouts of Arnault’s grown children even more tantalizing. My assumption is that eldest child (and only daughter) Delphine will stay in a commanding role, either at Dior or running the Fashion Group. (And yes, the LVMH Prize, too.) Antoine, the eldest brother, once had “lots of things coming,” as an LVMH spokesperson put it in November 2023. These days, however, he is outwardly rudderless, though I’m sure he makes plenty of impact behind the scenes. (Maybe it’s better that way?)
The younger boys are preoccupied with their timepiece businesses, which seem like threshold jobs. Jean, the youngest, is director of Louis Vuitton watches. Frédéric, the C.E.O. of LVMH Watches and also manager of the family office, is being introduced to more and more outsiders. Alexandre Arnault, currently the most compelling character in the quintet—he runs marathons, speaks perfect English, and wears Bode—is in the U.S. overseeing product and comms at Tiffany alongside longtime LVMH soldier Anthony Ledru. I heard that August sales at Tiffany were up year over year, which is a good sign for them both. But being in the U.S. means that Alexandre is missing out on the Saturday morning store calls, which Bernard Arnault does alone, or with a family member, every week. (During the Paris shows, he was spotted alone at Le Bon Marché conversing with sales associates.)
The Arnaults are a close-knit family by all accounts. And despite the hiccup with Burke’s semi-exit earlier this year, this is a carefully managed orchestration. After all, the Burke news leaked just six months after Arnault sent a letter to top executives saying that anyone who spoke about the family, or trade secrets, to reporters would be heavily reprimanded, and probably fired. The paranoia about leaks—people are afraid their phones are being tapped—indicates these are not merely cosmetic changes, but the first serious stages of succession planning. Remember, Arnault isn’t thinking two years ahead, he’s thinking 10 years ahead.
Acquisition Murmurs
Obviously, the warning against speaking to the press hasn’t stopped the chatter, indicating that some of Arnault’s closest advisors have been frustrated by how the restructuring of the business has been managed. After all, the luxury industry is at an impasse, and heavily diversified LVMH is uniquely positioned to take advantage of the moment. Along with trimming the executive ranks, there is more shedding to be done in the fashion portfolio. Last week, the internal speculation was that they were selling one more brand, and that it could be Stella McCartney—of which LVMH owns only a partial stake—or Kenzo.
When I asked an LVMH spokesman about Stella in particular, he told me it was “fake news.” But whatever they discard after selling Off-White won’t matter as much as what they buy. Many people in the investment community are convinced that the group is about to announce a major acquisition, probably not on par with 2021’s $15.8 billion Tiffany deal, but perhaps as culturally significant. Burberry, which just got a new C.E.O., Joshua Schulman, was one of the names batted around. But despite an appealingly low $2.3 billion market cap, I wonder whether LVMH would want to assume responsibility for such a challenging turnaround.
The other name in circulation has been Armani, whose founder will celebrate his 90th birthday with a show in New York City next week. But I’m told the speculation there is utterly unfounded. In recent interviews, Giorgio Armani has said that he wishes to remain independent as long as possible, without ruling out a future merger. (In other words: Never say never, but definitely not right now.) Also, Armani’s decision to bring the design teams out with him for his runway bow is an indication that he hopes for continuity whenever he does, eventually, have to step down.
Of course, LVMH was circling Tiffany for decades before it actually bought the company, so this may simply be the first of many instances where a possible acquisition is floated before the two parties pull the trigger. There’s also the question of whether LVMH would even want Armani, a clothier first and foremost, as it plans for the future. Even leather goods don’t feel like a great long-term bet these days, compared to travel and hospitality.
One of the reasons Armani came up so much last week is because of Hedi Slimane. The speculation among creative types was that he bought a property in Milan, and that he was headed to either Armani or another Italian house to design. (It’s incredible what can set off the rumor mill…) At this point, this one does feel like “fake news” to me, as my P.R. friend would say. And yet, Slimane could go anywhere and succeed. (Even an Italian house typically run by an Italian. They’d rather speak French than English, after all.)
Size-wise, though, the only other place that would make sense for Slimane in Milan is Gucci. Of course, he’s not the only LVMH designer whose name has been brought up in connection to that house. On Friday, everybody was talking about the email Kering employees received, indicating that all brands would pause social media and online advertising on October 6 and 7, spurring some to speculate that an announcement was forthcoming. (It was probably, actually, to avoid any kind of messaging during the anniversary of the Hamas-led attack on Israel, which makes more common sense.)
So no, an announcement didn’t happen, but I heard that certain employees were also told on Friday that if anyone asked whether Dior womenswear designer Maria Grazia Chiuri was headed to Gucci, they should say, “no comment.”
Just because Kering told folks not to comment doesn’t mean the Chiuri gossip is true. (The policy at most of these companies is to say no comment to everything.) As for Jonathan Anderson replacing her at Dior—or replacing both her and menswear designer Kim Jones—I’ve been reluctant to weigh in more than I already have because, as with all of this, it feels only half-informed. My understanding from people close to Anderson is that nothing is certain at this moment. (There’s a scenario in which Anderson goes to Dior, and Delphine is replaced by Burke as C.E.O., but that’s educated conjecture.) The only thing we do know is that Anderson has transformed Loewe, and LVMH will need to figure out a way to keep up the momentum if he leaves. For creative people, leaving on a high is the best way to go. For the executives—as the Arnaults know better than anyone—it’s imperative that all these brands outlast any single designer.
