Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Bernard Arneau’s son Frederick will step down from his role as CEO of LVMH’s watch division for more than a year, the latest in a series of moves within the dominant families of French luxury groups.
The change comes weeks after LVMH announced that 30-year-old Frederick, the second-youngest of billionaire Bernard Arnaud’s five children, will take over as CEO of cashmere specialist Loro Piana in June. This position is his first in LVMH’s fashion and leather products division, and the largest profit and revenue in the 294 billion euro group.
With ready-made coats sold for over 16,000 euros, Lolopiana is one of LVMH’s few fashion brands and is steadily growing. Last year, revenues were around 3 billion euros, and according to business-savvy people, its timeless, high-end positioning helped to withstand a wide range of slowdowns in the luxury market.
As Arnault children play a more prominent operational role within the group and older executive guards are set aside, inheritance is being watched closely in the world’s largest luxury group, including Dior, Louis Vuitton and Tiffany, other brands include Dior, Louis Vuitton and Tiffany.
However, a concrete decision is not expected anytime soon, as the group’s annual meeting in April is set to extend the age limit for CEO roles from 80 to 85. The Arnault family controls just under 65% of LVMH’s voting rights.
According to Bernstein analyst Luca Solca, inheritance is “still in progress.” “There’s a sense that Arnaud might be the best to survive the fittest and finally decide who remains and take over him.”
Arnault is known as a strict manager and is deeply involved in the daily work of the company, often visiting stores throughout the empire on Saturdays.
His eldest sons, Delphine and Antoine Arneau, were in a prominent position within the group for a while. Delphine, 49, is the CEO of LVMH’s second largest brand, Dior, and is also a member of the group’s executive committee. Antoine, 47, is responsible for imaging and sustainability across LVMH, and manages one of the holding companies whose families manage the group.
Now, young children are rapidly increasing their ranks.
Alexandre Arnault, 32, has been newly appointed to lead LVMH’s 6 billion euro Wine and Spirits Division, and Frédéric joined the LVMH boards in April last year along with Delphine and Antoine. Alexandre, who was a senior executive at US jeweller Tiffany until this year, was proposed on Thursday for the board of executives of Monkler, a luxury Italian outerwear group that LVMH has invested in.
Only Jean Arnault, the youngest of Bernard’s five children, does not have a board sheet yet.
Frederick and Alexandre both “want to be competitive and play a continuous role,” said one person close to the group. “Frederick is now head of a well-known brand, and Alexandre runs his portfolio,” says Moet Hennessy, of the drinks division.
However, change is at a challenging time for the global luxury market, especially in China, where economic concerns put stomp spending, which has been significantly cooler since the intense days of the pandemic luxury boom.
The US was supposed to be a growth engine for luxury under President Donald Trump as investors anticipated rapid deregulation. Arnaud has been a passionate personal relationship with the President. Bernard, Delphine and Alexandre all attended his inauguration in January.
But less than three months into Trump’s second term, the S&P 500 has fallen by more than 5% as investors acknowledge on the rafts of allies and rival aft.
The luxury industry, a net exporter to the US and with little manufacturing in the country, expected tariff exemption as Arnaud and its competitors formed connections within the administration.
But Trump’s threat to imposing 200% collection on European alcohol imports has been a blow to premium drink makers like Moet Hennessy, who have already struggled with business in the US in recent years, showing how difficult it is to predict the president’s next move as relations with Europe deteriorate.
