When pop star Katy Perry performed in jeweler Tiffany’s signature blue at the reopening of its flagship store in New York last year, Alexandre Arnault was offstage — but backstage he was front and center.
Alexandre, the third son of billionaire LVMH CEO Bernard Arnault, as the US company’s second-in-command, has been working on its development since the luxury group bought it for $15.8 billion after arduous negotiations in 2021.
The group announced this week that the 32-year-old will take on a new role as executive vice president of Moët Hennessy, the group’s €293 billion wine and spirits business, and will work alongside veteran LVMH CFO Jean-Jacques Guionni, who will become chief executive officer. executive.
“The idea is that Alexander will be a very close second,” a person familiar with the matter said. “This would give him additional experience in managing a small LVMH company, i.e. a portfolio of brands.”
Guionni, a 62-year-old former Lazard M&A banker who spent two decades leading LVMH’s finances, is also expected to play a pivotal role in revitalizing the division, which is under pressure from declining Cognac and Champagne sales in key markets including China and Europe. US.
But the plan is to eventually hand over leadership to Alexander, according to people familiar with the matter.
Katy Perry performed at the reopening of Tiffany’s flagship store in New York last year © Kena Betancur / AFP via Getty Images
“The impression is that it is a transitional phase, as Guionni will accompany Alexandre” before his delivery, said Jean Danjou, luxury goods analyst at Oddo BHF.
The reshuffle at the helm of LVMH has highlighted Alexander’s path at the world’s largest luxury group.
All five of Arnault’s children have moved into increasingly prominent executive roles, while the older generation of executives close to their 75-year-old father is taking a step back – fueling speculation in boardrooms and cocktail parties around Paris about… Caliphate.
The shift comes at a testing time for the industry, which was already dealing with slowing growth and now faces the possibility of tariffs under the incoming Trump administration.
Delphine Arnault, 49, is a member of the executive committee and CEO of Dior, the group’s biggest brand after Louis Vuitton, and Antoine, 47, is CEO of the Christian Dior SE holding through which the family controls LVMH as well as being responsible for image and sustainability. across the group.
Frédéric, 30, was promoted to run LVMH’s watchmaking division at the beginning of the year and joined the board alongside Alexandre in April. Jean, the youngest at 26 and the only Arnoult child not yet to join the board, leads Louis Vuitton’s watch business.
With his keen marketing vision and enviable celebrity connections, Alexander oversaw the multi-million dollar renovation of Tiffany’s flagship store, which is now the group’s best-selling outlet.
He was also behind advertising campaigns featuring music royalty Beyoncé and Jay-Z, and another with the slogan “Not Your Mother’s Tiffany,” as part of efforts to raise and modernize its image.
Daughter Delphine Arnault runs Dior, the group’s second-largest brand after Louis Vuitton © Julian De Rosa/AFP via Getty Images
Four years at luggage maker Rimowa also gave him experience in the fashion and leather goods division, the group’s largest, helping transform it from a serviceable German brand into a fashion must-have.
LVMH does not disclose Tiffany’s sales figures. However, analysts at HSBC estimate that the brand’s sales have grown from just under $4.4 billion in 2019, before the deal, to €5.4 billion ($5.8 billion) in 2023.
Group-wide watch and jewelery revenue fell 3 percent on an organic basis in the first nine months of this year to €7.5 billion amid continued market weakness, especially in China and, for Tiffany, among aspirational shoppers in the US. Tiffany is now the fourth largest profit contributor among the group’s nearly 100 brands, according to HSBC.
The younger Arnault will leave the jewelry company at some point, as it continues to transform itself from a seller of mid-sized silver and engagement rings into a high-end jeweler aiming to compete with the likes of Richemont’s Cartier — a process that will take a 10-year project, according to Oddo’s Danjou, who financiers close to the company said. The group said it would require investments worth billions.
Guioni was expected to take a step back in his next position after he appointed his successor, MP Cécile Cabaniss, in June. But this is not the first time Arnault has relied on one of his trusted executives to take on a new challenge.
Sidney Toledano, 73, runs LVMH’s fashion group – which includes brands such as Céline, Loewe and Givenchy – behind the scenes, although he officially handed the reins to former Louis Vuitton boss Michael Burke in February.
However, when Burke had to withdraw for personal reasons, Toledano was recruited again, according to people familiar with the situation.
For Guiony, the change makes sense: in addition to his long experience in the group, he is a wine expert and has quietly headed LVMH’s Vins d’Exception business alongside his duties as CFO, which owns the group’s most distinguished producers including Château Cheval Blanc and Clos The Lambrays. .
Moët Hennessy is not the largest division in the group, but it includes key brands ranging from Cognac to Champagne © Adam Davy/PA
Alexandre was also involved in this side of the business and worked closely with Guiony, taking a personal interest and building relationships in key winemaking regions such as Burgundy, the people said.
Moët Hennessy is not the largest division in the group but it includes key brands ranging from Hennessy cognac to Veuve Clicquot champagne and has recently come under pressure after several years of strong growth.
Sales fell by 8 per cent on an organic basis in the first nine months of the year, the largest decline in the group, due to lower demand for cognac and champagne after a pandemic-era boom.
The re-election of President Donald Trump in the United States may pose an additional challenge to the recovery if he follows through on his threats to impose tariffs on European exports, and even harsher tariffs on China.
Alexander may have some ties to the president-elect that could benefit the group. “He is a young man on the move, the son of one of the great businessmen and leaders of Europe and the world,” Trump wrote on X after dinner with Alexander and his wife at the Mar-a-Lago resort last year.
Outgoing Moët Hennessy CEO Philippe Schauss is seen as having managed the division well during the market downturn — launching new products and closing deals like its 2022 acquisition of Napa Valley winemaker Joseph Phelps Vineyards — but now “there is a theme of renewal and recovery.” “Alexandre and Jean-Jacques will take over,” said one person close to the group.
“There is fundamental thinking to be had on the Chinese market, especially for cognac,” said Oddo’s Danjou, although he believes the downturn in spirits is “largely cyclical.”
He added: “Many investors believe that Alexander wanted the opportunity to lead something bigger within the group, and this is a shift so that he can do that at the right time.”
