PARIS — Bernard Arnault is betting on family unity to guarantee the long-term future of his luxury empire.
At LVMH Moët Hennessy Louis Vuitton’s annual general meeting on Thursday, shareholders overwhelmingly approved the appointment of two of his sons to the board of directors, tightening the family’s grip on the leadership of the world’s biggest luxury group.
Alexandre Arnault, executive vice president of product and communications at U.S. jeweler Tiffany & Co., and Frédéric Arnault, chief executive officer of LVMH Watches, join their siblings Antoine Arnault, head of communication, image and environment at LVMH, and Delphine Arnault, chairman and CEO of Christian Dior Couture, in their new role.
That leaves the youngest sibling, Jean Arnault, 25, who is marketing and product development director for watches at Louis Vuitton, and who appears destined for a similar career trajectory in due time.
Bernard Arnault, LVMH’s chairman and CEO, has frequently described the conglomerate, which posted sales of 86 billion euros in 2023, as a family-run firm. The Arnault family’s holding company owns 48.6 percent of LVMH’s share capital and 64.3 percent of the voting rights.
After the meeting, the billionaire underlined the importance of taking a long-term view.
“We’re trying to create a spirit that is different from purely anonymous companies,” he told reporters.
“The role of the family is first and foremost to foster this spirit and it also allows us to have a long-term vision because today, everything is going well, the share price is rising, but what we care about is making sure that in 10 years’ time, our brands are still as desirable, if not more, as they are now,” he continued.
Arnault is well-placed to know the dangers of a divided clan. Early in his career, the entrepreneur capitalized on family owners’ internal disagreements to swoop in to acquire luxury brands, earning him the nickname “the wolf in cashmere.”
In recent years he has worked to shed that image in the face of rising anti-rich sentiment in France, where workers’ revolutionary leanings always bubble close to the surface.
At the AGM, a short film highlighted the LVMH Heart Fund, launched in 2021, which provides emergency financial aid, as well as social and psychological support, to help employees deal with sudden emergency situations.
“We take care of employees, we try to help them grow and develop their entrepreneurial spirit. And when things aren’t going well, we continue to take care of them. You see, we’re a company with a strong human side,” Arnault emphasized afterward.
The executive is known for prizing loyalty and promoting from within the company’s ranks. Last year, 72 percent of key posts were filled with internal talents, representing 18,000 appointments, Chantal Gaemperle, group executive vice president of human resources and synergies at LVMH, said in a presentation.
Bernard Arnault, Toni Belloni and other LVMH executives at the group’s annual general meeting.
Recent senior executive moves at the group show that Arnault, 75, is sharpening his succession plan. Thursday’s meeting saw Toni Belloni step down as group managing director and chairman of the executive committee after decades as Arnault’s right hand.
“He did most of the work. I was just there to supervise things. We make a great team and have done so for 23 years, so that’s quite a stretch. It shows there’s a continuity in business,” quipped Arnault, going on to laud Belloni’s people skills.
“He succeeded in creating a truly sensational atmosphere,” he said. “I’m a little less, how shall I put it, warm?” Arnault added, to laughter from the audience.
Belloni will be succeeded by Stéphane Bianchi, a relative newcomer to the company who was previously in charge of its watches and jewelry division. Bianchi takes on the new role at a time when luxury spending is slowing following several years of post-pandemic euphoria.
LVMH’s shares rose on Wednesday despite the company reporting that group sales fell 2 percent at actual exchange rates in the first quarter, with analysts highlighting its ability to navigate choppy economic conditions better than many of its competitors.
Arnault was characteristically bullish on Thursday, saying he expected Vuitton’s new flagship on the Avenue des Champs-Elysées, currently under construction, to rival Tiffany’s Landmark store in New York City for the crown of the world’s leading luxury flagship.
However, he cast doubt on reports that the multi-use building would include a hotel.
Former Louis Vuitton chairman and CEO Michael Burke first floated the idea of a Vuitton hotel, to be located in the company’s headquarters near Pont-Neuf, in an interview with WWD in 2022.
After Burke handed over the running of LVMH’s star brand to Pietro Beccari last year, Vuitton took possession of a mammoth building on the Champs-Elysées previously earmarked for Dior’s new headquarters.
At a show on the construction site last fall, Nicolas Ghesquière, creative director of womenswear at Vuitton, said it would be a hybrid space including a store, a cultural venue and a hotel, to be designed by architect Peter Marino.
“We have still to determine some elements of what exactly we will put in there because I keep reading that there will be a hotel, which I’m personally not too convinced about,” Arnault said.
“There are already lots of hotels in Paris, frankly. There’s already the Cheval Blanc, which is the most beautiful,” he added, referring to his trophy property on the Seine.
Beccari previously won over Arnault with his plans for the Dior mega flagship on Avenue Montaigne, which also includes a restaurant, an exhibition space and a private apartment, but the two are likely still debating the details of the Vuitton project, which does not yet have an opening date.
Arnault also expressed optimism about the outlook for China, ahead of Chinese President Xi Jinping’s official visit to France in early May, timed to coincide with the 60th anniversary of the renewal of Paris-Beijing diplomatic relations.
“I hope that economic tensions will ease and that we can continue sustained economic collaboration with China,” he said, noting that LVMH’s sales to Chinese nationals rose in the first quarter. “I think this is a trend that will continue. I think China will succeed in reviving its economy.”
Arnault said he had just returned from a trip to Japan, accompanied by his daughter Delphine, during which he witnessed long lines in front of the stores of Celine, another one of his brands.
LVMH reported organic sales in Japan jumped 32 percent in the first quarter, helped by tourists taking advantage of the weak yen. While the U.S. only posted a 2 percent increase, Arnault was confident about its prospects, too. “The United States, I think, is going to bounce back,” he predicted, without elaborating.
If not, there’s always outer space. The luxury mogul shared that he had once been asked to create bespoke Louis Vuitton interiors for a rocket. “The person who suggested this also proposed to take me for a ride on a rocket. I thought that maybe it wasn’t such a great idea, as I try to avoid taking unnecessary risks,” he said with a chuckle.
Arnault said the conversation was about a voyage to Mars, but declined to confirm whether the other party was SpaceX founder Elon Musk, whom he met with last year. “That’s a secret,” he demurred.