In a few months’ time, half a million spectators will cheer a flotilla of barges carrying 10,000 Olympic athletes along the River Seine to the Eiffel Tower. There they will meet the beau monde of global sporting leaders, politicians and dignitaries, including the richest man in Europe, with a net worth estimated by Forbes to be around €200 billion. Few of the superhuman twentysomethings at the opening ceremony of the Olympics and the Paralympic games will recognise, Bernard Arnault, but they will all be aware of at least some part of the empire he has stitched together to create the world’s largest luxury goods group, Louis Vuitton Moët Hennessy.
He prefers to let his brands – 75 of them, including Louis Vuitton, Christian Dior, Tiffany and Fendi – do the talking, and the greatest sporting occasion in the world is no exception to that rule. One, Chaumet, a Paris jeweller, has designed the Olympic medals. Another, Berluti, is dressing the French team from head to toe. VIP guests will sip champagne from Dom Pérignon, which he also owns.
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What a golden moment for him. After spending a lifetime creating Europe’s most valuable company – with a market capitalisation exceeding €400 billion – he will be at the heart of the French establishment and in the global spotlight. (The price of admission to Europe’s party of the decade? A premium sponsorship cheque rumoured to be €150 million.)
It will be a family affair. Arnault will be surrounded by his five children: Delphine, 49, and Antoine, 46, from his first marriage to Anne Dewavrin, and Alexandre, 31, Frédéric, 28, and Jean, 26, a trio he had with his current wife, Canadian-born concert pianist Hélène Mercier. Each man will wear an almost identical Dior navy suit. Delphine will wear a Dior skirt. It has become the family uniform.
There will be no unseemly jockeying for a podium place with the patriarch, but luxury industry analysts will study the group for body language that might indicate Arnault’s choice of successor. Change is afoot in the first family of fashion and le Tout-Paris wants to know who’s up and who’s down in the family’s game of gilded thrones.
Meet the Arnault family
Earlier this year LVMH announced that Frédéric would step into the newly created role of CEO of LVMH Watches, with responsibility for its TAG Heuer, Hublot and Zenith brands – which have a combined turnover of €1.76 billion, according to analysts. Both Frédéric and Alexandre, who is executive vice president of product and communications at jewellery brand Tiffany, are expected to join the board at LVMH’s AGM in April.
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The pair will see familiar faces around the table at the firm’s headquarters on Avenue Montaigne in Paris. Already on the board are Delphine, who was recently promoted to lead Christian Dior. Antoine is in charge of LVMH’s group communications and recently became CEO of Christian Dior SE, which holds 41 per cent of LVMH and is the company through which the Arnault family controls the luxury group. Jean, who runs watchmaking at Louis Vuitton, is not yet elevated to the board – but it is only a matter of time.
Arnault also recently changed LVMH’s corporate structure, giving new decision-making power to his children. LVMH’s controlling shareholder was transformed into a limited partnership, with Arnault as managing partner and the share capital held equally between his children. Each has a 20 per cent stake, and they cannot sell their shares for 30 years without unanimous board approval. No partner in the company can come from outside one of the five bloodlines for 30 years. The Arnault family owns 48 per cent of LVMH’s share capital and has almost 64 per cent of the voting rights, meaning the chances of a corporate raider gaining control of the firm are all but zero.
Arnault’s decisions to move his children closer to the business and give them more power have turbocharged the debate about who might succeed Papa. The 75-year-old chairman and CEO insists he has no plans to retire, ‘neither in the short or long term’. In 2022 the board raised the mandatory retirement age for the chief executive and chairman to 80, from 75. But at 75 anything can happen, and it can happen fast – as a sign in LVMH’s headquarters reminds senior executives. ‘We don’t have the luxury of waiting,’ it flashes.
‘Schooled by the best’
Any one of the children could take over because ‘they have been schooled by the best player in the world’, says Sidney Toledano, a former Dior boss who has worked closely with Arnault for decades. Each was sent to France’s elite schools and universities, where Antoine recently recalled to the New York Times that getting anything less than a perfect grade ‘wasn’t acceptable’. Alexandre has joked that his education in the family business started around the breakfast table when he was nine. When she was 10, Delphine and her father would visit Dior stores on weekends. The first watch Frédéric received was a TAG Heuer Aquaracer from his father. He now runs TAG Heuer.
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Each child was assigned a mentor as they entered the business at one of its brands, and each started on the shop floor. Delphine sold Dior perfume when she was 17. The five siblings regularly meet their father over lunch on the top floor of LVMH’s HQ to discuss everything from whether a smartwatch can be a luxury product to the price of a new Bulgari serpenti bracelet.
Arnault’s determination to keep LVMH dans la famille is likely to force him to elevate one of his children above the rest. But who? Ask them about succession – as I have both Antoine and Frédéric – and two things happen. First, the très correct PR minder makes a gesture that says: ‘I will personally throttle you with a Louis Vuitton monogram belt when this interview is over, you impudent Rosbif.’ Second, the Arnault heirs’ eyes narrow as they recite the same response almost word for word. ‘We all have immense respect, admiration and love for our father. It’s his will, and it’s also our will, that he stays in charge as long as possible.’
Who’s up and who’s down?
It’s possible some might not want the job. ‘There’s the risk that none of us is able to run the business as well as he has,’ Alexandre confessed to the New York Times last year. What’s more, heading Europe’s second largest company – which makes things that nobody really needs – attracts opposition. During recent political turmoil in France, protesters broke into LVMH’s head office and set off smoke bombs. Outside, demonstrators burned an effigy of Arnault – dressed as Mr Monopoly in a top hat – ‘as a symbol of the need to destroy capitalist evil’, as one demonstrator put it. Others carried signs claiming that he evaded taxes, exploited workers and laid off thousands to build power and wealth. He now travels with bodyguards.
Family sources deny all the claims and point out that the firm is France’s largest corporate taxpayer – half the €6 billion it paid in corporate tax worldwide in 2023 was paid in France. It invests more than €1 billion in France every year and has created hundreds of thousands of jobs globally, as well as supporting the arts to the tune of hundreds of millions of euros a year – and now, with the Olympics, sports.
The Christian Dior brand is one of Arnault’s favourites – it was the first significant luxury label that he acquired, in 1984. His decision to put Delphine in charge of it was initially thought to put her in pole position to become first among Arnault equals. But some say she might not want the scrutiny that comes with running LVMH. ‘She is very private,’ says a colleague.
Antoine has the most wide-ranging experience of the group. He has run both Berluti and Loro Piana. He is vice-chairman of the board. He is married to the model Natalia Vodianova, and they would make the perfect chic power couple to run the group.
Alexandre is the hippest and most modern. He had the smarts to take an old German luggage maker, Rimowa, and use it to modernise travel – 160 years after Louis Vuitton did the same thing when it began making travel trunks. He collaborated with Virgil Abloh at Rimowa and sealed a deal with Beyoncé and Jay-Z to be the new faces of Tiffany – a bold move that has helped to transform the brand’s fortunes.
Frédéric is the most tech-savvy and shares his life on social media – much to his father’s bemusement. He worked at Facebook’s artificial intelligence research department in New York after college before joining the family firm. Jean is too young to be in the running – at this stage.
Passing down a ‘house of brands’
Jonathan Siboni, chief executive of Paris-based Luxurynsight, points out that succession at LVMH is unique – and uniquely difficult. ‘Transferring assets from generation to generation is at the heart of luxury brands, whether it is control of a company – Hermès is at its sixth family generation – or a timepiece from father to son or a bag from mother to daughter. LVMH is the first luxury group and therefore the first major “house of brands” to have the challenge to manage a generational change, not only for one brand but for 75.’
Arnault knows all about the pitfalls of succession planning. He built his business on the failures of other wealthy families to plan for the future adequately.
When he was 28 he took over the construction company that had been run by his father and branched out into real estate, moving to the US to sharpen his capitalist claws. There a New York taxi driver told him that he didn’t know the name of France’s president ‘but I know Dior!’. It sparked an idea. He returned to Paris in 1984, aged 35, and snapped up a bankrupt textile conglomerate run by Marcel Boussac, an entrepreneur and racehorse magnate who financed Christian Dior. The price was one franc. He fired 9,000 staff and discarded everything except Dior and Le Bon Marché department store, which he decided to use as the first blocks to build his luxury edifice.
Arnault repeated the Boussac playbook, exploiting financial or operational weakness to snap up other luxury brands, earning the nickname the ‘wolf in cashmere clothing’. He pursued family-owned brands known for craftsmanship, among them Loro Piana, Celine and Pucci. But he didn’t have it all his own way: Gucci and Hermès slipped through his fingers after bruising public battles.
In recent years Arnault has diversified into luxury hospitality. LVMH’s holdings now include the growing Cheval Blanc and Belmond hotel chains, the Orient Express train service and the ‘21’ Club in New York.
Whoever takes over the empire is likely to do so at a good time: LVMH rarely has a bad year. Indeed, even as other luxury behemoths have stumbled in recent months, sales at LVMH have risen. After arch-rival Kering suffered a 9 per cent decline in sales in the third quarter of last year due to weak performance at its flagship Gucci brand, revenues at LVMH grew 10 per cent on an organic basis in the following quarter. This is in part thanks to Arnault’s ‘house of brands’ approach. When revenues at one or two labels decline – as happens in the fickle world of fashion – stronger brands can steady the ship. ‘We see no clouds on the LVMH horizon,’ says Luca Solca, leading luxury analyst at investment firm Bernstein.
Arnault likes to say that to ‘make sure that in 50 years we are still at the top’, LVMH’s main goal is to maintain ‘desirability’. Some close to the family say Alexandre and Frédéric are most in tune with modern notions of desirability, whether this is the need for sustainability or to be digitally native. They compete with one another – something their father encourages, in the same way that he likes to create rivalry among LVMH labels. But he insists: ‘I don’t have a favourite brand. How can one say that one prefers one of his children?’
He might soon have to make that choice.
This feature was first published in Spear’s Magazine: Issue 91. Click here to subscribe
