image: Louis Vuitton
Antoine Arnault, the son of LVMH Moët Hennessy Louis Vuitton scion Bernard Arnault, is taking on a new role. The French multinational luxury goods conglomerate’s chairman, 69-year old Bernard Arnault sent a memo to employees on June 1 announcing Antoine’s new responsibilities in his role as the head of the group’s image and communication. According to Bloomberg, Arnault “stressed the importance of the role, saying his son will be in charge of managing the ‘growing attention’ in the company from the media and public, and pointing to social media as an area of particular focus.”
Antoine Arnault’s appointment is hardly a surprising move. The 40-year-old has been in the family business – alongside sister Delphine Arnault, 43, the executive vice president at Louis Vuitton, and more recently step-brothers Alexandre and Frederic Arnault – for over a decade, starting in the advertising department of marquee brand Louis Vuitton and ultimately moving to CEO of shoes-and-custom suiting brand Berluti and chairman of Italian fine wool specialist Loro Piana.
Even more significant than the family ties at play is the need for attention to the reputation of the corporate giant that is LVMH. The French multinational luxury goods conglomerate – which was formed in 1987 with the merger of fashion house Louis Vuitton with spirits group Moet Hennessy – has thrived under the control of Bernard Arnault. In his time as the group’s chair, Arnault has overseen the acquisitions of Louis Vuitton, Givenchy, Celine, Christian Dior, and Loewe, among 70 or so other fashion and non-fashion brands, and catapulted the group’s revenues to more than $50 billion per year.
It is hardly a secret for LVMH aficionados that the senior-most Arnault has run LVMH in a particular way, one that has seen him described by the press as “ruthless,” “able to exploit,” “famously litigious,” and “a wolf in cashmere clothing.” He is famous for “exploiting family disputes,” as the Financial Times put it; ousting creatives from their eponymous labels; and building up secret stakes in companies – on more than one occasion. You may recall that in the not too distant past, Arnault set his sights on Hermes and Gucci and incited attempts to takeover the two companies without their owners’ knowledge or approval.
These two specific takeover efforts were not ultimately successful, as neither Gucci nor Hermes call LVMH their parent. However, the conglomerate’s business of “aggressively monetizing creative talent” and operating as a “barbarian at the gilded gates” – the New York Times’ choice of words – has worked. Arnault, himself, is the fourth richest man in the world and the richest individual in fashion, thanks to the larger-than-life conglomerate he has built.
His billion-dollar acquisition exploits have not going unnoticed. Media outlets have begun to focus on the activities of fashion’s largest conglomerates with increasing vigor in the age of constant news coverage and social media scandals. Couple this increase in attention with the fact that news reports have found an indelible home on the web, no longer subject to the forgiveness that once came with tossed-away newspapers. This is something that any consumer-facing brand must wrestle with.
In terms of LVMH, this gives rise to the question of just how sustainable it is to engage in notoriously “aggressive corporate raiding.” Can such “ruthless decision-making” tactics be regularly undertaken by a publicly traded company in our inherently connected digital era when consumers have taken to demanding transparency from an increasing number of angles?
One might be able argue that LVMH was only able to secretly – and as a French court would hold, illegally – build up a 23.1 percent stake in Hermes and walk away relatively unscathed in terms of the media largely due to the climate at the time; WWD – which was still very much just a print publication at the time – covered the back-and-forth between LVMH and Hermes, as did financial sections of various mainstream newspapers. Nowadays though, there is simply so much more media attention surrounding LVMH and its corporate exploits … and it is all accessible by way of a simple Google search 24/7.
LVMH knows this. It also appears to understand that if it wants to maintain its level of extraordinary success, it must at least attempt to put forth a good face, after years of simply not operating that way. (To be fair, it didn’t really have to).
Such efforts by LVMH to perform in a way that is pleasing not only to shareholders but to the growing number of demanding consumers are coming on more than one front. For instance, last year, LVMH teamed up with its rival conglomerate Kering to establish a charter for the well-being of models that has been implemented across their rosters of brands. Certainly a show of good faith on behalf of the industry leader. Around the exact same time, LVMH also announced that it would invest more to improve its environmental credentials as fashion businesses seek to reassure shoppers who are increasingly drawn to eco-friendly brands.
Still yet, in March, LVMH vowed to take steps to close the gender gap. Ten years after the Paris-based conglomerate launched EllesVMH, a gender diversity-centric initiative, it announced that it would join a French task force on gender equality. In addition to France being the first European country to join this initiative, which was launched by the World Economic Forum, LVMH was the first French luxury group to announce its alliance with French President Emmanuel Macron’s gender equality task force.
And not to be left on the sidelines in terms of philanthropy and arts initiatives, LVMH funded and built Fondation Louis Vuitton, a gleaming arts museum situated along the western edge of the 16th arrondissement of Paris. Following a 55 year lease, so to speak, ownership of the museum will be transferred to the city of Paris as “a gift.”
Bernard Arnault said the Fondation, which opened in October 2014, is a “showing that we are very good (citizens) and that we are working not only for profit, but also for something that is transcendent.”
LVMH’s efforts are soundly in line with a rise in consumer awareness as to how, where, and by whom their clothing is being made, and the mounting reputational risk that comes with a lack of vigilance in this realm.
This is something that Antoine Arnault spoke to directly at a conference in Brussels last fall, saying: “We need to be more transparent. We can’t do everything in secret anymore.” He added, according to Bloomberg, that “the desire for a more open company was shared among the younger generation at LVMH.”
Taken together, these elements are all part of a broader strategic shift by LVMH. As the New York Times’ Vanessa Friedman wrote in late 2015, LVMH is shifting “from a global sector domination machine to a kinder, friendlier giant, an approach that has been shaped by Delphine Arnault, as well as her brother, Antoine, and one that it increasingly seems may define the group for the future.”
LVMH’s awareness of the “growing attention from the media, observers, public authorities, as well as the general public,” and specifically, the “increased exposure” – as Arnault’s memo worded it – that comes as a result, suggests that the group is well aware of the need to craft its reputation more carefully than it has in the past.
As for whether that means LVMH will not attempt to acquire your family brand right out from under you, that is another matter entirely.
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