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TThe luxury trip got a boost last week when LVMH co-founder and CEO Bernard Arnault – “The Wolf in cashmere” – and the world’s richest man – gave his daughter Delphine the keys to Parisian Christian Dior. The couture house that reinvented the modern fashion industry in 1947.
The symbolism of the move was hard to miss: For months, observers speculated about a series of plans for Europe’s most valuable company, a purveyor of fashion, champagne, jewelry and real estate at the heart of the global luxury ecosystem.
Many observers have pointed to the fictional Roy family Success – Based on the Murdoch clan. Royce said they had nothing against the Arnaults. Four sons and one daughter each have a role in the empire, vying for control. And now the eldest daughter, at the age of 47, sits at the head of Dior, a symbolically, if not economically, significant brand.
The luggage and handbag maker Louis Vuitton accounts for half of its parent company’s profits, but Dior was the first house Arnold, 73, bought in 1984 on a tip from a New York taxi driver. So, in familial genealogical and sentimental terms, it’s in the middle.
A former student at the London School of Economics and the eldest of the Arnold children, Delphine’s elevation means she is the only child to serve both on the board of directors and on the executive committee of parent company LVMH. Charged with overseeing all production related activities.
It was Delphine who led Dior during John Galliano’s creative frenzy, and whose empire rested on their creative shoulders serving as an ambassador for the designers.
For the next year – at least – Louis Vuitton’s product and marketing blitz will include a collaboration with 93-year-old Yayoi Kusama, the Japanese artist with polka dots, metallics or pumpkins, pumpkins and “unknown pieces of glass” – all of which can pop up wherever LVMH clients do. That means they form a global ecosystem of ultra-resources in Instagrammable districts, resorts, activities and art destinations.
Under Delphine’s leadership, Arnault said, “The demand for Louis Vuitton products has grown exponentially, allowing the brand to regularly set new sales records. Her deep insight and unrivaled experience will be critical assets in guiding Christian Dior’s continued growth.
Delphine’s promotion comes less than a month after her younger brother Antoine was appointed CEO and vice chairman of the board of the company that controls LVMH.
Some interpreted it as the start of a series of battles at the $418bn (£340bn) company over its legacy. The Murdoch empire is often seen as the epitome of one man’s drive — and one that could crumble without its earthly creator — like Arnold, 18 years Rupert Murdoch’s junior and 10 times richer.
“Nothing is done in a hurry at LVMH,” said Thomas Chauvet, a luxury analyst at Citi. “The drivers of this industry are global economic growth, wealth-influence, international travel and consumers with barriers to entry. It’s all about family ownership, and maybe they’ve gone through a lot of candidates and decided she’s the best fit to run the brand.”
But Arnott recently shook up LVMH’s corporate structure to extend his tenure until he is 80 or older. Last week, Pietro Beccari, who led the Christian Dior brand since 2018 and quadrupled sales to €8.7bn, replaced 40-year veteran Michael Burke as Louis Vuitton’s next chairman and chief executive.
With sales estimated at €21.8bn last year, Burke has turned Louis Vuitton into an economic powerhouse – including a 2017 collaboration that launched the luxury streetwear category. Louis Vuitton now accounts for more than half of LVMH’s profits.
Crucially, it is Beccari who oversees the seamless integration of Tiffany’s US jewelry business, which Arnott bought two years ago for $16 billion, led by the youngest of the family, 29-year-old Alexandre Arnott.
The announcements come as China, whose Chinese luxury customers account for a third of global luxury sales, announced that it was lifting zero-covid travel restrictions. In the year Retailers are hoping for the kind of spending that came with the brief lifting of Covid restrictions in 2020, and it comes as US consumers, who have held back luxury spending for the past three years, start to flag.
“We don’t see any clouds on the horizon of LVMH,” said Luca Solca, a luxury goods analyst at Bernstein, adding that China’s luxury spending could increase by 35% this year.
But Delphine’s appointment may prove useful in other respects. Women are rising to the top of creative roles in traditionally male-dominated fields. Fashion journalist Amy O’Dell says: “You hear, by chance, that Dior is flying off the shelves – maybe because female designers understand what women wear and what they buy.”
Dior LVMH With 75 labels ranging from fashion and jewelry, champagne, hotels and art foundations — and high-end dog food, it’s just one piece of the puzzle of how LVMH became the world’s largest luxury-goods conglomerate.
Part of LVMH’s success is leading the development of the luxury industry. Controlling distribution means controlling the price, the shopping experience and often the location, be it Paris, London, Shanghai, New York, Singapore or Milan.
“The reality is that strategy revolves around delivering consistent growth year after year at Louis Vuitton,” says Chauvet. “You can do experiments with jewelry or watches or fragrances or collaborations, and some of them may be new product categories, but the permanent static canon is not wholesale and no discounts.”
William Middleton, Paris-based fashion writer and author of the forthcoming Karl Lagerfeld biography; Paradise nowIt describes the extraordinary growth of French fashion and luxury collections over the past three decades. In the 90s, he says, the industry in New York or Milan was very sophisticated in business. The founding of LVMH and Kering (PPR) and the importation of talents such as Galliano or Alexander McQueen or the acquisition of houses such as Gucci heralded an explosion of growth.
“In the 90s, Chanel had its office at 31 Rue Cambon, a beautiful little building where Karl worked on the top floor. Now, they have taken over the entire street and maybe 1,200 people work there. Chloé had its offices above a shop on rue Sainte-Honoré. Now there are two or three buildings for the archive. Yves Saint Laurent had his two-story headquarters at 5 Avenue Marceau; It is now the 140,000 square foot convent of Abbé de Pentemont.
“There is a French word InequitableMiddleton added. As the luxury industry prepares to present its autumn-winter ready-to-wear collections, shopping shows for exclusive venues, celebrities and handbags; Inequitable It’s a word worth thinking about.
“The scale of these companies, the fashion business in Paris, is huge now, and Bernard Arnault is a big part of that.”
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