“A mistake”: Bernard Arnault receives letter from Warren Buffett about retirement at 80
“Who’s next?”
That’s the only question luxury experts and fashion lovers have about the industry’s biggest company, LVMH.
The Paris-based giant has always been led by founder and CEO Bernard Arnault, the 75-year-old patriarch, who is also one of the richest people in the world (he topped the richest list last year).
Given LVMH’s power as one of Europe’s most valuable companies and owner of some of the most beloved luxury brands, everyone — from investors to consumers — is interested in the company’s future.
Arnault’s children are involved in the family business, and most also sit on the board of LVMH. This sparked parallels with the TV show “Succession” and theories about who could take over the company.
But it will be a while before there are definitive answers, because Arnault has no plans to retire. And while the LVMH boss is aware of speculation about his successor, he says the verdict is still out.
“I have five family members working in the group. Let’s see if any of them can take over,” Arnault told Bloomberg in an interview published this summer.
As is common among founder-CEOs, Arnault sees LVMH as his “baby.” He spends 12-hour days managing the company he turned into a global conglomerate with €86.2 billion ($92.17 billion) in revenue last year.
The luxury chief had the LVMH board extend the retirement age for its chairman and CEO (i.e. himself) from 75 to 80, just so he could stay longer. After that, Arnault received a letter from then-93-year-old Warren Buffett, the legendary investor and founder of Berkshire Hathaway, warning that it was a mistake because the age limit was too low, according to Bloomberg.
Preparing the heirs
The future is inevitable — as is the eventual succession at LVMH.
The company has been reshaping its leadership, including hiring former Danone CFO Cecile Cabanis as next in line to replace longtime CFO Jean-Jacques Guiony.
However, the Arnault family still maintains tight control over LVMH, with around 64% of voting rights and a 48% shareholding in the company. The structure of the conglomerate’s holding company, Agache, was changed to resemble a limited liability company, which gives even small shareholders more power.
The second generation Arnaults have also taken on important roles in the company over the years.
Delphine, 49, is president and CEO of Christian Dior Couture, part of LVMH’s most profitable segment covering fashion and leather goods.
Antoine, 47, is the conglomerate’s director of image and environment, having been instrumental in LVMH closing a partnership with the Olympics.
Alexandre, 32, is the executive vice president of the jewelry brand Tiffany & Co.
Frédéric, 29, leads LVMH’s watch brands, including Tag Heuer and Hublot, where younger brother Jean, 25, is director.
In addition to Jean, four of the five children are on the LVMH board.
LVMH’s succession may be shrouded in mystery, but we know who the players are and the stakes in deciding who will take over from Arnault. The patriarch is in no rush to leave, so we will have to wait and watch.
