When pop star Katy Perry carried out clad in jeweller Tiffany’s signature shade of robin egg blue on the reopening of the New York flagship retailer final yr, Alexandre Arnault was offstage — however behind the scenes he was entrance and centre.
The third youngster of LVMH’s billionaire chief govt Bernard Arnault, Alexandre had, as second-in-command on the US firm, been engaged on its turnaround for the reason that luxurious group purchased it for $15.8bn following laborious negotiations in 2021.
This week the group introduced the 32-year-old would tackle a brand new position as deputy chief govt of Moët Hennessy, the €293bn group’s wines and spirits enterprise, working alongside veteran LVMH chief monetary officer Jean-Jacques Guiony, who will turn out to be chief govt.
“The concept is Alexandre can be a really shut second,” an individual conversant in the matter stated. “This may give him further expertise in managing a mini-LVMH, that’s to say a portfolio of manufacturers.”
Guiony, a 62-year-old former Lazard M&A banker who has spent twenty years piloting LVMH’s funds, can also be anticipated to play a pivotal position in revitalising a division that’s below stress from falling gross sales of cognac and champagne in key markets together with China and the US.
However the plan is for him finally handy management to Alexandre, in keeping with individuals conversant in the matter.
“The impression is that it’s a transition, through which Guiony will accompany Alexandre” earlier than handing over, stated Jean Danjou, luxurious analyst at Oddo BHF.
The reshuffle on the prime of LVMH has shone a highlight on Alexandre’s trajectory on the world’s largest luxurious group.
All 5 Arnault kids have moved into more and more outstanding operational roles whereas an older era of executives near their 75-year-old father is taking a step again — fuelling hypothesis in boardrooms and cocktail events throughout Paris over succession.
The shift comes at a testing time for the business, which was already coping with slowing progress and now faces the potential of tariffs below the incoming Trump administration.
Delphine Arnault, 49, is a member of the manager committee and chief govt of Dior, the group’s largest model after Louis Vuitton, and Antoine, 47, is chief govt of holding firm Christian Dior SE by which the household controls LVMH in addition to being in command of picture and sustainability throughout the group.
Frédéric, 30, was promoted to run LVMH’s watchmaking division firstly of the yr and joined the board alongside Alexandre in April. Jean, the youngest at 26 and the one Arnault youngster but to hitch the board, leads Louis Vuitton’s watch enterprise.
With a pointy eye for advertising and an enviable Rolodex of superstar contacts, Alexandre oversaw the multimillion-dollar refurbishment of Tiffany’s flagship retailer, which is now the group’s top-selling outlet.
He was additionally behind campaigns that includes music royalty Beyoncé and Jay-Z, and one other that includes the slogan “Not your mom’s Tiffany”, as a part of efforts to raise and modernise its picture.
4 years at baggage maker Rimowa additionally gave him expertise within the style and leather-based items division, the group’s largest, serving to remodel it from a serviceable German model to a style set must-have.
LVMH doesn’t disclose Tiffany’s gross sales figures. Nonetheless, analysts at HSBC estimate that the model’s gross sales have grown from just below $4.4bn in 2019, earlier than the deal, to €5.4bn ($5.8bn) in 2023.
Watch and jewelry revenues group-wide fell 3 per cent on an natural foundation within the first 9 months of this to €7.5bn amid persistent market weak point, notably in China and, for Tiffany, amongst US aspirational buyers. Tiffany is now the fourth-biggest contributor to earnings among the many group’s roughly 100 manufacturers, in keeping with HSBC.
The youthful Arnault leaves the jeweller partway because it continues to rework itself from a purveyor of silver and mid-market engagement rings to a high-end jeweller that goals to compete with the likes of Richemont’s Cartier — a course of that shall be a 10-year venture, in keeping with Danjou at Oddo, and that financiers near the group have stated would require billions in funding.
Guiony had been anticipated to take a step again in his subsequent position after he named his successor, deputy Cécile Cabanis, in June. Nonetheless this isn’t the primary time Arnault has relied on one among his trusted executives to tackle a brand new problem.
Sidney Toledano, 73, has been working LVMH’s style group — which incorporates manufacturers resembling Céline, Loewe and Givenchy — behind the scenes, regardless of having formally handed the reins to former Louis Vuitton chief Michael Burke in February.
Nonetheless, when Burke needed to pull again for private causes, Toledano was drafted again in, in keeping with individuals with data of the scenario.
For Guiony, the change is smart: beside his lengthy expertise within the group, he’s a wine connoisseur and has quietly chaired LVMH’s Vins d’Exception alongside his CFO duties, which owns the group’s most unique producers together with Château Cheval Blanc and Clos des Lambrays.
Alexandre was additionally concerned on this facet of the enterprise and labored carefully on it with Guiony, taking a private curiosity and constructing relationships in key winemaking areas resembling Burgundy, the individuals stated.
Moët Hennessy is way from being the group’s largest division but it surely homes key manufacturers starting from Hennessy cognac to Veuve Clicquot champagne and has extra not too long ago been below stress following a number of years of sturdy progress.
Gross sales fell 8 per cent on an natural foundation within the first 9 months of the yr, the sharpest decline within the group, on account of falling demand for cognac and champagne after a pandemic-era growth.
The re-election of President Donald Trump within the US might current a further problem to restoration if he follows by on threats to levy tariffs on European exports and even steeper ones on China.
Alexandre might have some cachet with the president-elect that would profit the group. He “is a younger man on the transfer, the son of one of many nice businessmen and leaders in Europe, and on the earth,” Trump wrote on X after a dinner with Alexandre and his spouse at Mar-a-Lago final yr.
Outgoing Moët Hennessy chief govt Philippe Schaus is considered as having managed the division nicely by the market downturn — launching new merchandise and doing offers resembling its 2022 acquisition of Napa Valley winemaker Joseph Phelps Vineyards — however now “there’s a topic of renewal and restoration that Alexandre and Jean-Jaques will tackle”, stated one of many individuals near the group.
“There’s a basic reflection that can have to be had on the Chinese language market, particularly for cognac,” stated Oddo’s Danjou, though he believes the downturn is spirits is “largely cyclical”.
He added: “Many traders assume Alexandre wished the chance to steer one thing larger inside the group, and it is a transition in order that he can do this in time.”