Bernard Arnault in witty mood at LVMH results’ presentation

Last Thursday, a few seconds after 6 pm CET, as soon as trading at the Paris Stock Exchange closed for the day, luxury tycoon Bernard Arnault took to the conference room stage at the LVMH group’s headquarters in Paris, at 50 Avenue Montaigne.

Arnault, who took over as CEO of LVMH in 1989, announced the group had set a new revenue record in fiscal 2023, reaching €86.2 billion, to an audience comprising the heads of LVMH’s various divisions, seated in the front rows, and financial analysts and representatives of the business press, in the rows behind them.

Despite a stubborn cold and a hoarse voice, Arnault regaled the audience with anecdotes and various quips, aimed at collaborators and competitors alike. On stage alongside him for the presentation, were Jean-Jacques Guiony, the group’s CFO, who paid close attention to each division’s performance, and deputy managing director Antonio Belloni, who remained mostly silent.

“I’m not planning to leave, neither in the short nor the medium term”

LVMH recently confirmed that its board has decided to co-opt Arnault’s sons Alexandre and Frédéric, and Arnault forestalled questions about the group’s future governance.

“[LVMH] has announced that two more members of the [Arnault] family will be joining the board of directors. I think this is great, since it’s the done thing in quite a few countries, and it brings fresh blood to the board. But I’ll say it right away, I’m not planning to leave, neither in the short nor the medium term,” said Arnault. “It may put your mind at rest, or make you very sad, but in principle, I’ll be here for quite a while. Some of you are smiling. That’s fine, this doesn’t seem to be causing panic among my closest collaborators,” he added, glancing at the audience’s front row.

Arnault briefly mentioned some of the group’s top executives, like Stéphane Bianchi, head of LVMH’s watch-making division, “who will soon be assuming a new role,” and Chris de Lapuente, referring to the “remarkable” results posted by Sephora, the only brand “that will be impossible to slow down,” according to Arnault. 

Arnault, a clever tactician and a luxury expert, set out to explain that, with the global luxury sector facing a complex situation, desirability stems from well-managed growth. And that, despite his successful deputies’ ambitious plans, the LVMH skipper is keen to grow at a prudent pace. Undoubtedly, this was also a way of managing investors’ expectations for the group’s fiscal 2024 results.

“I am often told ‘Why do you only grow by 8% or 9%?’ “I hope we won’t do more than that,” Arnault said twice. “I’d rather slow down than accelerate. I am fortunate enough to have collaborators who need to be held back. For example, Pietro [Beccari, formerly with Dior and now in charge of Louis Vuitton], whom I constantly need to curb. The same goes for Delphine [Arnault, in charge of Dior]. And let’s not even talk about Michael [Burke, formerly of Louis Vuitton, who will take charge of LVMH’s fashion division]. I spent 10 years reining him in at Louis Vuitton.”

With regards to Louis Vuitton, Arnault extolled the watches developed by La Fabrique du Temps in Geneva, which creates “genuine mechanical wonders,” selling between €500,000 and €1 million. He further hinted at his passion for watches, describing a high-end model produced in just a handful of copies, featuring on the dial Einstein sticking out his tongue. “It even tells the time,” he quipped.

Arnault mentioned Louis Vuitton and Dior, but he also paid attention to Bulgari and Tiffany, whose “operating income tripled compared to the year before we bought it.” He didn’t dwell on the results of the other labels belonging to LVMH’s fashion and leather goods division, save for a few words on Celine and Loewe, and on the results of Berluti, the label led for the last 10 years by Antoine Arnault.

Instead, he focused on his group’s main assets, blending anecdote with analysis: “There was an interesting article in the Financial Times this morning. It’s a very well-informed newspaper, just like [French business daily] Les Echos. In fact, I recommend Les Echos, it’s a very good newspaper,” said Arnault – who owns Les Echos.

“[The FT] article said that the LVMH group, in the soft luxury sector, has the world’s two most powerful brands, Louis Vuitton and Dior, and they have two quite remarkable competitors, Chanel and Hermès. In terms of hard luxury products, in other words watches and jewellery, we have two extraordinary brands, Tiffany and Bulgari, and among their competitors there’s a highly successful group, Richemont, which also owns two great brands: Cartier and Van Cleef & Arpels. So, of the eight [luxury] brands I regard as the best in the world, we own half. Not bad,” said Arnault. “We shall see what will happen next, whether we’ll manage to extend our boundaries a little, or to encourage certain brands to join the first four,” he added.

By “extending our boundaries,” does Arnault mean forging new ties with Richemont? “I think Mr. Rupert [president of the Richemont group] is an exceptional leader. I have no wish to disrupt his strategy. I’ve always understood he was eager to remain independent. It’s a fine idea, and if he needs help maintaining his independence, I shall be there,” he said, clearly relishing his words.

Neither Arnault nor Guiony provided details about the group’s plans for external growth. Last year, LVMH acquired Chateau Minuty, “becoming the leading producer of Provence rosé wines.” Finally, Arnault turned his attention to the main real estate operations carried out in recent months.

“This is something the group has always been active in, ever since I took charge,” he said. “We are always trying to secure and buy the best possible premises for our businesses. From early on, we have always occupied certain prime positions. We have three of the best on Fifth Avenue in New York, and on the Champs-Elysées in Paris. It’s not buying such premises that needs to be avoided, but buying B+ ones at AAA prices. Unfortunately, this is what some of our competitors don’t seem to have quite understood,” he concluded, his last barb confirming he is belligerent as always.