Succession in Paris: The race to inherit the empire of the world’s luxury king

4 days ago 40
By Liz Alderman and Vanessa Friedman

September 19, 2023 — 7.07am

\]One day successful July, not agelong aft being named the wealthiest antheral connected the satellite by Forbes, Bernard Arnault, the caput of the LVMH Moët Hennessy Louis Vuitton luxury goods empire, took his spot connected a signifier earlier a assemblage of French dignitaries and reporters.

In the beforehand enactment sat 4 of his 5 big children — the 5th was watching from New York, wherever helium is an enforcement astatine Tiffany & Co. Their begetter had raised each of them to 1 time tally the LVMH conglomerate.

LVMH main  Bernard Arnault, with woman  Helene, has been moving   to marque   definite   his institution  — created by gobbling up   galore  European luxury houses that had been weakened by bickering household  owners — volition  enactment   firmly successful  his family’s hands.

LVMH main Bernard Arnault, with woman Helene, has been moving to marque definite his institution — created by gobbling up galore European luxury houses that had been weakened by bickering household owners — volition enactment firmly successful his family’s hands.Credit: AP

The juncture was Arnault’s announcement that LVMH would supply €150 cardinal ($248 million) to sponsor the 2024 Paris Olympics. LVMH companies volition play a starring role. Chaumet, a Paris jeweller, volition plan the Olympic medals, and Moët Hennessy wines volition travel successful hospitality suites.

“The concern volition assistance beforehand France passim the world,” Arnault declared. As tv cameras zoomed in, his eldest son, Antoine, the caput of communications and representation for LVMH, uttered what could beryllium a tagline for this immense institution his begetter has built: “For a dream, determination is nary price.”

It was a infinitesimal of nationalist triumph for Arnault, a motion of however embedded successful the cloth of France LVMH has become. Over much than 30 years, helium has forged LVMH into the world’s largest luxury radical and the astir invaluable institution successful France, with a beingness successful 81 countries. His brands — 75 of them — are the stars of the luxury world, including Louis Vuitton, Christian Dior, Tiffany and Dom Pérignon Champagne.

But his occurrence has brought challenges. In France, Arnault has go a lightning rod for choler implicit increasing economical inequality. In April, 10 days aft Forbes enactment him atop its yearly database of richest people, protesters stormed his bureau successful Paris during nationwide strikes implicit raising the status age.

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And successful caller months LVMH’s banal has taken a beating, down 19 per cent since hitting a precocious successful April. The institution reported a dip successful US income successful the 2nd quarter, and the Chinese economy, a large root of LVMH’s revenue, is faltering.

At 74, Arnault has been moving to marque definite his institution — created by gobbling up galore European luxury houses that had been weakened by bickering household owners — volition enactment firmly successful his family’s hands. Last year, helium persuaded the committee to rise the mandatory status property for the CEO and seat to 80, from 75, and created a firm operation that ensures the family’s power of LVMH, locking successful his children — each of whom has been named to highly disposable positions wrong the institution — arsenic the main decision-makers.

Arnault’s changes mean helium doesn’t person to discontinue adjacent twelvemonth arsenic primitively expected. That hasn’t stopped speculation astir whether helium tin guarantee that his heirs debar a Succession-like drama. (The French media is afloat of headlines comparing the Arnaults with the Roys, the fictional household successful the HBO series. The household hates this talk, and takes pains to play down parallels to the show.)

At 28, Frederic Arnault is the CEO of Tag Heuer.

At 28, Frederic Arnault is the CEO of Tag Heuer.

The eldest sibling is Delphine, 48, seat and CEO of Christian Dior Couture and a subordinate of the LVMH enforcement committee and its board. Antoine, 46, is not lone successful complaint of the group’s representation and sustainability efforts but CEO of its menswear marque Berluti, seat of the Italian luxury location Loro Piana, CEO of Christian Dior SE and a subordinate of the LVMH board. Both are from Arnault’s archetypal marriage, to Anne Dewavrin. The youngest 3 are from Arnault’s 2nd marriage, to Hélène Mercier, a Canadian performance pianist: Alexandre, 31, is enforcement vice president of merchandise and communications astatine Tiffany; Frédéric, 28, is CEO of Tag Heuer; and Jean, 24, is Louis Vuitton’s ticker director.

In a uncommon interrogation successful LVMH’s office successful Paris, Arnault brushed disconnected immoderate examination with television’s Roys.

“It’s not an obligation, nor inevitable, that a kid is my successor,” helium said. “The champion idiosyncratic wrong the household oregon extracurricular the household should beryllium 1 time my successor. But it’s not thing that I anticipation is simply a duel for the adjacent future.”

Every month, the 5 siblings conscionable with their begetter implicit luncheon connected the apical level of LVMH’s headquarters.

For an hr and a half, they sermon business, including finances, upcoming merchandise introductions and the societal media payoff of over-the-top events. For example, a Vuitton menswear amusement by the brand’s caller decorator Pharrell Williams attracted specified names arsenic Kim Kardashian and LeBron James, resulting successful implicit 16 cardinal YouTube hits.

“Make nary mistake,” Jean said. “We sermon things, but astatine the end, it’s helium who decides.”

Amid the bonhomie, the siblings say, Arnault is gauging however each of his children is measuring up.

A postgraduate of France’s elite École Polytechnique, Arnault honed his children’s mathematics skills astir each nighttime earlier dinnertime. Antoine recalled that getting thing little than a cleanable people connected important exams “wasn’t acceptable.”

Ian Rogers, a erstwhile main integer serviceman astatine LVMH, said Alexandre had told him, “My concern acquisition started erstwhile I was 9, astatine the meal table.”

By property 10, Delphine was accompanying her begetter to Dior stores. He has made play inspections of LVMH properties successful Paris with his children a regular for much than 3 decades.

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The begetter paired each of his children with a mentor arsenic they entered the business, to thatch them the brands and show their performance. Delphine and Antoine started successful novice positions earlier ascending to the C-suite. The 3 youngest moved much rapidly into elder roles, “probably due to the fact that helium feels clip is moving retired and helium needs to velocity up the process of learning,” said Pierre-Yves Roussel, a erstwhile main of the LVMH manner radical and the existent CEO of Tory Burch.

All of them recognize that the household itself is present arsenic overmuch a marque arsenic the brands they own, and person wasted nary clip making their beingness known.

In little than 2 years astatine Tiffany, Alexandre helped seal a woody with Beyoncé and Jay-Z, creating a societal media sensation. (In 2016, Alexandre persuaded his begetter to get Rimowa, a German shaper of aluminum suitcases, which was founded successful 1898. He instantly acceptable astir making the utilitarian luggage institution cool.) Delphine created the LVMH Prize for Young Fashion Designers, a high-profile endowment competition. And Antoine has thrown wide the antecedently closed doors of galore LVMH companies with a bid of “open days” that invitation the nationalist wrong factories and workshops.

The question present is who tin support desirability astatine the bosom of LVMH successful an property of protests and planetary economical uncertainty.

Arnault insisted repeatedly during the interrogation that his main extremity was not profits. “It’s desirability,” helium said, “and we indispensable marque definite that successful 50 years we are inactive astatine the top.”

“Desirability,” said Roussel, is the astir fashionable connection astatine the company. But it highlights a imaginable problem, helium said: “A user waking up and saying, ‘You know, I’m buying this product, but there’s idiosyncratic making truthful overmuch wealth retired of it.’

“Is it desirable that you’re buying a merchandise from idiosyncratic who is the richest antheral successful the world?”

In France, Arnault is simply a divisive figure: hailed by the concern and governmental worlds for gathering the country’s biggest firm titan, and reviled by others for his astir unimaginable wealth.

In April, arsenic France’s nationwide protests gathered steam implicit President Emmanuel Macron’s bid to rise the status property 2 years to 64, demonstrators broke into the LVMH headquarters, denouncing Arnault arsenic the embodiment of the ultrarich. “He is simply a awesome of what is incorrect successful this society!” 1 shouted.

 Alexandre Arnault, vice president   of Tiffany & Co.

“There’s the hazard that nary of america is capable to tally the concern arsenic good arsenic helium has.“: Alexandre Arnault, vice president of Tiffany & Co.Credit: Getty Images

The question present is who tin support desirability astatine the bosom of LVMH successful an property of protests and planetary economical uncertainty.

Last year, Arnault tinkered with the firm operation of his empire, concentrating decision-making with his 5 children. Each has a 20 per cent stake, and they cannot merchantability their shares for 30 years without unanimous committee approval.

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His heirs “have been schooled by the champion subordinate successful the world: All of them cognize the business,” said Sidney Toledano, caput of the LVMH manner radical and 1 of Arnault’s longest-serving executives. “Are they going to beryllium the pilots? Maybe.”

If the adjacent CEO is not named Arnault, the children accidental they are OK with that. After all, Alexandre said, “there’s the hazard that nary of america is capable to tally the concern arsenic good arsenic helium has.”

This nonfiction primitively appeared successful The New York Times.

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