LVMH's chief executive and the world's third-richest man Bernard Arnault
changed the rules at his company so he could stay in charge a little longer.
In the regulatory filing, LVMH said it would seek to raise the age limit for
chief executive officers from 75 to 80 at its next annual general meeting.
According to Fortune, Monday (21/3), Arnault, who just celebrated his 73rd
birthday this month, has been running the company for nearly four decades.
Extending his tenure gives Arnault more time to decide on succession plans,
and many analysts expect one of his five children to take over, possibly
setting up a family competition similar to HBO's Succession.
All of Arnault's children work at LVMH. The eldest, Delphine Arnault, 46,
widely considered the strongest takeover candidate, is executive vice
president for Louis Vuitton and Arnault's only child to sit on the company's
executive team.
But the Delphine brothers are also competitors. Antoine, 44, is head of
communications and imagery at LVMH; Alexandre, 29, worked as executive vice
president at Tiffany's recently acquired LVMH; Frédéric, 27, is the chief
executive of TAG Heuer; and the youngest, Jean, 23, serves as director of
marketing and development for Louis Vuitton watches.
Arnault also has a number of colleagues on his executive team who may be
running.
Antonio Belloni, group managing director in charge of strategic and
operational management of LVMH companies, Michael Burke, Bulgari and Louis
Vuitton CEOs, and Nicolas Bazire, Groupe Arnault managing director in charge
of development and acquisitions, have all worked at LVMH for more than 20
years. two decades and may require serious consideration.
What the analysts say
“This seems to signal that Bernard Arnault plans to stay longer at the helm
of the group, an overall positive for LVMH, as successors will have more
time to mature and gain experience and traction,” said Luca Solca, senior
research analyst at the group. global luxury goods in Bernstein.
When asked if any of Arnault's children were positioned to take over, Solca
told Fortune, "Yes, I believe this is possible," he said.
The proposed age limit change suggests Arnault "gives himself more time to
decide" on his succession plans, Philippe Pele-Clamour, a professor at the
HEC Paris business school, told Bloomberg.
Arnold's story
Bernard Arnault, born to a wealthy family in Lille, first joined the luxury
business by acquiring bankrupt Agache-Willot-Boussac, the textile and retail
conglomerate that owns Christian Dior, from the French government in 1984.
After acquiring the troubled company, Arnault laid off 9,000 workers in two
years, a move that earned him the nickname "The Terminator."
He stripped the company of nearly all of its assets, retaining only the
Christian Dior brand and French luxury department store Le Bon Marché, and
in 1987 returned the company to profitability.
Then Arnold began to develop. In July 1988, Arnault invested $1.5 billion in
a holding company, co-founded with Irish beverage company Guinness, to
purchase a 25% stake in the Louis Vuitton group, which had merged with Moët
Hennessy in 1987.
Rumors circulated that LVMH would form a “minority block” against Arnault,
so Arnault spent $600 million more to buy another 13.5% of the group, making
him its largest shareholder. More nicknames followed, including "Wolf in
Cashmere" and "Machiavelli of Finance."
After Arnault took control, more acquisitions took place. Between 1989 and
2001, LVMH acquired Céline, Berluti, Kenzo, Guerlain, Loewe, Marc Jacobs,
Sephora, Thomas Pink, Emilio Pucci, Fendi, DKNY, and others.
Following the acquisition, Arnault placed a key figure into the position of
creative director to revitalize the brand. He hired Marc Jacobs as creative
director of Louis Vuitton in 1997, and appointed John Galliano as head of
Givenchy in 1995 and then Dior in 1996. He also appointed the recently
deceased Virgil Abloh as artistic director of Louis Vuitton in 2018.
The acquisition continues to this day. LVMH recently acquired jewelry maker
Tiffany, and rumors are circulating that Arnault is considering buying Ralph
Lauren.
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