LVMH Executive Turmoil! Revenue Down 11%, Succession Crisis Emerges

LVMH, the world's largest luxury goods group, announced a change in top management. Cecile Cabanis will take over as chief financial officer in February, while Jean-Jacques Guiony will move to Moet Hennessy as chief executive. Veteran executive Philippe Schaus will move to a non-executive role, while Alexandre Arnault, son of Bernard Arnault, will become deputy CEO of Moet Hennessy and executive vice president of Tiffany. LVMH also appointed Charles Delapalme as chief executive of Hennessy Cognac. The changes show LVMH's emphasis on its wine and spirits division, which saw revenue fall 11 percent in the first three quarters of the year. China has imposed anti-dumping measures on EU cognac, and French cognac exports have fallen. Analysts believe that Alexandre Arnault may be at a disadvantage in succession planning, under the dual pressure of the market and succession planning, Bernard Arnault's children are facing challenges.

Group senior personnel changes frequently. Sephora CEO Guillaume Motte will join the executive committee next year. Former Executive Committee member Chris de Lapuente retired and Maud Alvarez-Pereyre took over as head of Human resources. The resignation of Chantal Gaemperle drew attention. It was reported that she had been suspended for being too radical in her reforms and abusing her authority. Chantal Gaemperle served LVMH for 17 years, driving talent development and increasing the proportion of female executives. Her departure leaves LVMH with fewer women on its executive committee. The LVMH executive committee is experiencing a rejuvenation, such as the rapid promotion of Stephane Bianchi and the joining of 38-year-old Benedetta Petruzzo at Dior. Delphine Arnault is struggling to boost Dior's performance, while revenue in the fashion leather goods division has fallen. The group also had to deal with the impact of creative directors such as the departure of Hedi Slimane and Kim Jones to focus on Dior.

The luxury goods industry is currently facing a global downturn, with Bain Consulting and Fondazione Altagamma predicting that the global personal luxury goods market will shrink by 2% to €363 billion in 2024. Sales in China are expected to decline by 20% to 22%, with recovery likely to take until the second half of 2025. Bain Partner Federica Levato noted that this is the first decline in the industry since the 2008 financial crisis. The Swiss watch industry is also in recession under the influence of the decline in the Chinese market, and exports have fallen sharply. Johann Rupert, chairman of the Richemont Group, said global demand for watches had passed its peak, particularly in China. The Tiffany brand acquired by LVMH has changed more slowly and has not significantly affected LVMH's advantage in the field of fine jewelry. Alexandre Arnault was moved to the wine and spirits division, possibly because Tiffany's performance did not meet expectations. The Arnault family succession plan is unclear, Bernard Arnault raised the retirement age to 80, five children are in the group line. Markets are uncertain about which of Mr Arnault's children will lead the group. Bernard Arnault's personal fortune shrank to about $164 billion as LVMH shares rose 1 percent to 580 euros, taking its market value below 300 billion euros.