Is there anything that can take the wind out of LVMH’s (Moët Hennessy Louis Vuitton’s) sails at the moment? By the looks of it, no. Not in the short term at least. But the question of succession looms large over the company’s future.
The luxury goods titan, owner of a portfolio of top brands from fashion houses such as Christian Dior to Swiss watchmaker Zenith, has had a remarkable few weeks. On Monday, the Bernard Arnault-controlled behemoth became the first European company to achieve a $500 billion valuation after shares in LVMH rose 0.3 per cent to €903.70, reaching a market capitalisation of €454 billion. It came off the back of strong first-quarter results from the group last week, showing revenue growth of 17 per cent year on year to €21 million amid rebounding Chinese consumption as the group continues to put the impact of the pandemic well and truly behind it. Arnault, who boasts a personal fortune in excess of €220 billion, also replaced Elon Musk as the world’s richest man in December.
But what comes after the 74-year-old, who has helmed LVMH since forming the company with the merger of the two titular brands in 1987, remains something of a mystery. And while there is no clear heir apparent to Arnault’s empire, his children – Delphine, Antoine, Alexandre, Frédéric and Jean – are considered the most likely candidates.
Arnault has reportedly been auditioning his offspring for the top job. The Wall Street Journal and others have reported that he has promoted some of them to important roles within his fiefdom. Delphine became head of Christian Dior in January while Antoine became chief executive of the group’s main holding company. Alexandre Arnault, meanwhile, is an executive at Tiffany while Jean serves as head of marketing at Louis Vuitton’s watch division.
Arnault will be well aware of the potential for succession battles to roil a business, as Angelina Rascouet and Tara Patel wrote for Bloomberg recently, having himself “weaponised” similar fault lines in rival companies to LVMH’s considerable advantage. For the moment, however, the wily “wolf in cashmere”, as one of those rivals famously dubbed him, is keeping schtum about his plans. When the question was put to him in January, the Frenchman quipped: “You will have noticed that the retirement age is being raised.”
