A combative Arnault extols record 2022, reveals LVMH will appoint new Fashion Group CEO
Bernard Arnault predicted strong growth for LVMH in his address to the luxury group’s AGM on Thursday morning in Paris, as he revealed there would shortly be a management shuffle of top executives.
Confirming recent rumors, he said Fashion Group CEO Sidney Toledano was about to shift position. “We will continue to work together but with another role. I cannot say anything more, but we shall announce something shortly. In any case, a huge thanks to Sidney for the formidable job he has done during all these years as head of our Fashion Group, with many brands, and notably that of Celine,” explained Arnault, eliciting a huge round of applause from the audience of some 1,500 in the Carrousel du Louvre.
The news will spark speculation about Toledano’s successor, with the firm favorite being Michael Burke, who after a decade left the role of CEO of Louis Vuitton in early 2023.
Arnault was also fulsome in his praise of Burke.
“My congratulations to Michael Burke. He has done an extraordinary job for the past 10 years. He is the person who led Louis Vuitton to be the number one brand in luxury. Now Vuitton is managed by Pietro (Beccari), who has brilliantly developed Dior for five years. It is now managed by Delphine (Arnault's daughter) and Charles Delapalme. In this very important task, they will continue the route taken by Pietro,” said Arnault speaking from a rostrum.
As noted, LVMH scored a 16% rise in net profit to €14.7 billion in 2022 and a 17% increase in turnover to €79.2 billion in a record year for the group, which includes 70 luxury brands. On the Paris Bourse, LVMH’s stock price grew by 23% compared to the market average of 5% in 2022; and a further 30% this year.
“Our record year is the consequence of the exceptional work by teams of artisans, boutique managers, executives and creators. We would like to thank them all warmly. The motor is our capacity to create desire with innovative and exceptional products, that are resistant and technically inventive, while respecting the environment… It is not always easy to manage very creative people, but we have the capacity,” argued Arnault.
Nonetheless, it all felt like a curiously nervous AGM, with Arnault and four different senior executives incessantly highlighting the group's many brand’s successes, even as he groused about public perceptions of his conglomerate. Last week, the group also suffered the indignity of an invasion of their main headquarters on luxurious Avenue Montaigne by scores of flare-wielding protestors as part of protests against the Macron government’s decision to increase the retirement age in France from 62 to 64.
“I hear some people say we don’t pay any taxes. When in fact, we pay more taxes than anyone else,” he snorted, standing before a huge backdrop featuring images of Léa Seydoux, Beyoncé, Dom Perignon, Dior Sauvage, Tag Heuer’s Carrera watch, Berluti shoes, Samaritaine and the Dior museum – most of them from brands linked to his five kids.
According to LVMH’s financial brochure given out at the AGM, the group paid €5.4 billion worldwide last year.
Arnault, who became the richest man in the world last week, according to market capitalization, overtaking Elon Musk and Jeff Bezos, has also become the target for many protestors in left-leaning France.
The 74-year-old entrepreneur was at pains to underline that by the end of 2022, LVMH employed 196,000 worldwide and hired 15,000 in France in the past year. So keen was LVMH to present a positive image, they even projected on a back screen two video commentaries from French economists – one in France, the other in London – extolling the virtues of the luxury group with bright-eyed fervor.
Though when it comes to hiring and firing Arnault was most in the news last month in France after the apparent sacking, or “forced departure” of Nicolas Barré, the editor-in-chief of Les Echos, Continental Europe’s leading financial daily, which he also controls. Journalists were also pointedly not allowed to ask questions at today’s AGM, despite several attempts.
“LVMH is a family business, in which we believe each participant is not an employee, but a member of the family. Attached to the group, as we are attached to them. We have sense of responsibility to the environment in countries where we work, and a commitment to social responsibility,” insisted Arnault, who together with his five children controls the majority of LVMH’s voting rights.
The luxury lord carefully underlined how much capital investment his group made in France – €1 billion last year, with €30 million in the Champagne region for a new R&D center. Though he nonetheless then carped about the refusal by students at a top French engineering university to accept a €100 million LVMH research center.
“The French like to be French and they think that the state should do this. Let’s see how that works out after 20 years!” he snorted.
Prominent time was also granted to human resources director Chantal Gaemperle and eldest son Antoine Arnault, the director of Image and Environment, who has overseen multiple eco-positive activities by LVMH. In a smooth presentation, he highlighted projects to regenerate biodiversity for five million hectares; support for farmers in Chad to fight against segregation; aid for People For Wildlife covering 40,000 hectares; reforestation action in Brazil with UNESCO; and the recycling of 180,000 meters of fabric in the past year.
While Gaemperle stressed that LVMH had recruited 61,000 people last year, as some 6,500 staffers moved to other companies within the group.
Looking ahead, Arnault lamented he could not attend Vuitton’s next show in Seoul on April 29, as he would be in New York for the new Tiffany boutique opening. “The opening of Dior at 30 Montaigne made it the most beautiful boutique in world, that is until Tiffany opens next week,” chuckled Arnault.
In a running commentary on LVMH highlights Arnault gushed about the appointment of Pharrell Williams as menswear designer at Vuitton, “that will be very, very interesting.” And he extolled Dior for “completely covering” Harrods and sighed when mentioning “the incredible and absolutely magnifique” runway shows in Seville and Mumbai by Dior.
“Celine – is now the fifth most desirable brand in fashion along with LV and Dior, I won’t mention the other two!” he harrumphed, winning another laugh.
“Loro Piano had great performance, and its figures are very good. While Loewe and Jonathan Anderson are realizing their potential,” he noted.
Turning to the group’s other divisions, he cheered that LVMH had “widened our perimeter in California” by acquiring Joseph Phelps Vineyards in January 2022, and said the recent acquisition of Minuty, the St Tropez rosé, had turned LVMH into the biggest producer of Provence rosé.
He was also enthusiastic about beauty chain Sephora winning market share, especially in the US, and its launch of exclusive product lines – like Fenty. “Rihanna’s beauty business is developing incredibly. It’s up 50% and one of the top makeup brands in America and now in France.”
That won another murmur of satisfaction from shareholders. Each of them leaving with a gift of a bottle of champagne and the news that LVMH’s 2022 dividend, payable next week. It will be 12 euros.
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