Succession and ambitions: Bernard Arnault holds firm at LVMH shareholder meeting

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Bernard Arnault, June 2022 Credits: Credit: ERIC PIERMONT / AFP

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Addressing shareholders of the world's leading luxury group, LVMH, its CEO Bernard Arnault, 77, has postponed the debate on his succession. He preferred to set medium-term goals for his group instead.

The topic of succession prompted one of the very first questions from shareholders at the general meeting in Paris on Thursday. When asked about his potential successor among his five children, all of whom work at LVMH, Bernard Arnault sidestepped the question.

"Last year, you renewed my term for the next ten years with 99 percent of the vote. We will discuss all this again in seven or eight years, if you don't mind," the billionaire replied. During the 2022 general meeting, LVMH voted to amend its statutes, raising the age limit for the CEO to 85.

To date, the leader has not indicated who might take over the reins of the global luxury giant. Four of his five children are on the LVMH board of directors. Two of them, Antoine Arnault and Delphine Arnault, are now part of the executive committee.

The regularly raised question fuels speculation. During recent media appearances, his second wife, Hélène Mercier, mother of the three youngest children, assured that there were no tensions between her sons and the two eldest.

On Thursday, for the very first time at a general meeting and perhaps as a gesture of fairness, the patriarch invited each of his children to speak in turn. He called upon Jean, marketing director of watches for Louis Vuitton; Frédéric, chief executive officer of Loro Piana; Alexandre, chief executive officer of Moët Hennessy; Delphine, CEO of Dior; and finally Antoine, who is in charge of the group's image.

"Well, the children, you have seen the children... Do they look very ambitious? I don't know... It is for you to tell me," Bernard Arnault quipped to his audience. "Shareholders are kept informed of each of their activities. They are very focused in their specific areas and all five, as you could see, are brilliant in their respective fields," he later told the media.

Confident

More broadly, the chairman outlined his ambitions for the medium term. "What matters most is where we are going, where will we be in five years? What will be the nature of the group in five years?" he said. He cited "formidable assets" for remaining at the forefront of the luxury sector, which has just experienced several years of slowdown.

The CEO has set the goal of making the jeweller Tiffany & Co., acquired in 2021 for nearly 16 billion dollars, "the world's leading jewellery brand". "We are not far off, but we are not there yet. In five years, I think we can get there," he affirmed. "I am very confident about our group's development over the next five years. That is why when the shares drop a little, as has been the case for some time, I buy more," he also said.

Bernard Arnault and his family have also recently increased their stake to 50.01 percent of LVMH's capital, holding 65.94 percent of the voting rights. In the shorter term, the group has been penalised, like its competitors, by the war in the Middle East. This cost it 1 percent of organic growth in the first quarter. The region is very dynamic for the luxury sector and accounts for about 6 percent of its total sales.

"Everything depends on how this crisis unfolds," Bernard Arnault commented. "Either it will be a global catastrophe with extremely serious and very negative economic developments. At that point, who can say how the year 2026 will unfold?" he asked.

"Or it will be resolved one way or another, more quickly, which we all hope for, even if it does not seem easy. At that point, business will gradually return to normal," he affirmed.

This article was translated to English using an AI tool.

Bernard Arnault

LVMH