Opinion: Bernard Arnault Can’t Avoid the LVMH Succession Question

Bernard Arnault, founder and chief executive officer of LVMH Moet Hennessy Louis Vuitton SE, this week hit out at a six-part series in French newspaper Le Monde that included allegations of tensions within his family. While his rebuttal post on X is entertaining — he touches on suggestions that the Arnaults are “the last royal family of France,” and visitors having to remove Hermes ties — his missive isn’t the right way for Europe’s richest person to address what is becoming a flashpoint for investors: which family member will succeed the 77-year-old at the helm of his luxury empire.

At the company’s annual meeting in April, all five of Arnault’s children gave short presentations for the first time. Yet at the same gathering, in answer to a shareholder question, the patriarch told investors that given they’d backed him to remain as CEO until aged 85, he would talk about transition in “seven or eight years.” Given how speculation about family fault lines has broken through to the public discourse — stoked by Arnault’s own response — that timeline has shortened.

Arnault said in the X post that people betting on cracks in his family would wait a long time. But succession risks becoming the defining issue at LVMH. Terry Smith, CEO of investor Fundsmith LLP, wrote in a shareholder letter earlier this month that he’d sold his stake in the company because of doubts over China’s recovery and because “family succession plans are also an increasing concern.” Even if he’s not quite ready to anoint an heir, Arnault should at least acknowledge that the generational shift is coming, and reassure investors that he has a credible plan.

LVMH is in the fortunate position that all of the founder’s children have been schooled to follow in his footsteps, and all work in the business. Delphine, 51, is CEO of Christian Dior Couture, LVMH’s second-biggest fashion brand after Louis Vuitton. Antoine, 49, is head of image and sustainability for LVMH. He also oversaw LVMH’s sponsorship of the Paris Olympic Games in 2024. Both Delphine and Antoine sit on LVMH’s executive committee. Younger son Alexandre, 34, is deputy CEO of LVMH’s wines and spirit division, while Frederic, 31, leads quiet luxury favourite Loro Piana. The youngest, Jean, 27, looks after the watch category for Louis Vuitton.

Options include nominating one child as leader, forming a committee of his offspring to oversee the company or appointing an external replacement as CEO. If one of the younger children is the chosen one — as some industry-watchers suspect — a non-family member could lead in the interim, echoing the approach of Prada. But if this is the plan, it should be spelled out clearly, as well as identifying who any potential caretaker CEO might be. Investors won’t want a repeat of the situation at Ray-Ban owner EssilorLuxottica SA where, four years after the death of founder Leonardo Del Vecchio, disagreements have frozen a planned restructuring of the family holding company Delfin Sarl.

Arnault didn’t participate in a call with investors on Monday after LVMH announced first-half earnings. That’s not unusual; he typically only joins for annual results. Still, it looks like a missed opportunity to address the issue. It’s as if he’s trying to keep the family and business separate. But given that the Arnault holding company owns more than 50 percent of the shares in LVMH, they’re inextricably linked.

Arnault needs to revive LVMH’s performance, which would help to dispel concern that family disharmony is hurting the business and buy some time to best decide how to manage the transition. Here, he provided some reassurance: Sales of crucial fashion and leather goods rose for the first time in two years in the three months to June 30, although the rebound was less than expected by analysts.

Dior, where Delphine Arnault is leading a turnaround, has been a particular focus, given the brand’s refresh under designer Jonathan Anderson. LVMH said Dior’s sales rose among all key customer groups in the first half, with double-digit expansions in the US and Japan in the second quarter. The US led momentum within fashion and leather goods and across the group. However, spending by Americans, bolstered by rising stock markets and AI wealth, was directed more to watches and jewellery. It was the same picture in South Korea and Japan. Meantime, Chinese demand for Louis Vuitton bags and Dior sneakers was flat.

Despite the progress, the shares are not far above their five-year low. The spotlight on the family dynamics will do little to encourage a rally. Arnault said in his X response that luxury thinks in generations, rather than quarters. To demonstrate this long-term mindset, he needs to outline his plan for the coming eras — without fracturing the present.

By Andrea Felsted

Learn more:

Bernard Arnault Joins X as LVMH CEO Fights Off Rumours of Family Disunity

French newspaper Le Monde published a six-part series last week on the tycoon, including alleged tensions among his family members driven by succession.

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