Faced with a slowing business situation, the Chairman of LVMH decided to rejuvenate the executive team, promoting his children to more important positions.
On November 14, LVMH announced a series of important changes in the executive board. Accordingly, Chief Financial Officer (CFO) Jean-Jacques Guiony will be transferred to the position of Director of the Wine and Spirits Division from February 1, 2025, replacing Philippe Schaus, who will leave the group after 21 years of service.
Chairman and CEO Bernard Arnault also appointed Alexandre Arnault as vice president of the division. The 32-year-old is one of the billionaire’s five children and is vice president of Tiffany & Co., headquartered in the United States.
Alexandre Arnault was appointed in the wake of Donald Trump’s election as president. He is known to have close ties to the Trump family and was invited to dinner with his wife, Geraldine, at Trump’s Mar-a-Lago estate last year. “He is a very promising young man, the son of one of the great businessmen and leaders in Europe and the world,” Trump tweeted in February 2023.
The trend of rejuvenating the executive board and consolidating the power of his children has been implemented by billionaire Bernard Arnault recently. To date, 4 out of his 5 children hold important positions.
Specifically, Delphine Arnault, 49, is the President of Dior, the group’s second largest brand. Antoine Arnault, 47, is the Director of Image and Environment. While Frédéric Arnault is currently the CEO of LVMH’s watch division at the age of 30, and Jean Arnault, 26, is the CEO of Louis Vuitton’s watch division.
Alexandre Arnault, 32, who was recently appointed as deputy general director of the wine and spirits division, is said to have many opportunities and challenges. Because he has to co-lead the group’s weakest division.
LVMH’s wine and spirits sales fell 8% in the first nine months of the year, hit by a sharp slowdown in demand in its two key markets, the US and China. Alexandre knows the US market well and has a good relationship with Trump, but he will have a headache in China, with Beijing imposing tariffs on European spirits.
In addition, Alexandre Arnault will move to manage a business with extensive operations, from vineyards to distilleries, with a large and unionized workforce, requiring more direct management skills than the fashion and watch brand CEO positions that his brothers and sisters are currently holding.
Along with the changes to the wine division, LVMH also confirmed the departure of Chantal Gaemperlé, who had been its human resources director for the past 17 years. According to La Lettre on November 7, Gaemperlé was suspended due to an internal investigation into the accumulation of “material benefits” from subsidiaries. Maud Alvarez-Pereyre, currently the director of talent and transformation, will replace Gaemperlé.
The changes come just weeks after Chris de Lapuente, executive board member and CEO of select distribution — which includes Sephora, Le Bon Marché and duty-free — announced his retirement. LVMH’s deputy CEO position was also rejuvenated in March, with Stéphane Bianchi, 59, replacing Antonio Belloni, 70.
The sweeping reshuffle of the group’s 70 luxury brands comes amid a sluggish business environment. The global luxury market is worth $386 billion and is expected to shrink by 2% this year, according to consultancy Bain & Company, as rising prices and economic uncertainty have shrunk the customer base from 400 million to 350 million.
Bain estimates that sales in China will fall by 20-22%, factoring in currency fluctuations, a blow to luxury brands after years of booming growth in the world’s second-largest economy, thanks to a growing upper and middle class.
“This is the first time the luxury sector has declined since the 2008-2009 crisis, excluding the pandemic,” said Federica Levato, an expert at Bain. Investors fear the recession will be longer and more severe than expected. LVMH shares fell nearly 19% at the end of the year on November 15.
LVMH’s third-quarter revenue fell 3%, its first decline since the pandemic, to $20.8 billion. Sales of its fashion and leather goods division, which includes brands such as Louis Vuitton and Dior, fell 5%, compared with a forecast for a 4% increase. This was the first decline since 2020.
In terms of markets, sales in Asia (excluding Japan) fell 16%, worse than the 14% decline in the second quarter, as purchasing power in China continued to be affected by the real estate crisis. According to LVMH, consumer confidence in the country has fallen to its lowest level since the pandemic.
Also on November 15, DFS Group, a retailer owned by LVMH, announced that it would close its operations at the historic Fondaco dei Tedeschi building in Venice, Italy, resulting in the layoff of more than 220 employees. Over the past five years, the store has lost $105.36 million due to Covid and a decrease in Asian customers.
“This difficult decision is part of a global restructuring driven by the challenging economic climate and uncertain outlook facing DFS and the travel retail industry worldwide, particularly the poor performance of the Venice store,” DFS said in a statement. Another of the company’s stores, located near the famous Rialto Bridge, whose lease expires in September 2025, will also not be renewed.
According to Bain, the luxury goods industry is expected to grow between 0% and 4% in 2025, supported by sales in Europe and the Americas, while China is expected to recover in the second half of next year. Levato said that Mr. Trump’s victory and the possibility of tax cuts could encourage Americans to spend more.
In addition, the market’s growth prospects also depend on the strategies that brands choose, including pricing strategies. One sign that high prices are holding back consumers is that outlet stores (genuine brands that are discounted due to being out of season, in stock or having minor defects) are outperforming thanks to the trend of finding products at low prices.
Source: vnexpress.net – Phien An ( according to Reuters, Le Monde )
Source: Vietnam Insider