One afternoon in July, not lengthy after being named the wealthiest man on the planet by Forbes, Bernard Arnault, the pinnacle of the LVMH Moët Hennessy Louis Vuitton luxurious items empire, took his place on a stage with a view of the Eiffel Tower earlier than a packed crowd of French dignitaries and reporters.
Within the entrance row sat 4 of his 5 grownup kids — the fifth was watching from New York, the place he’s an govt at Tiffany & Firm. Their father had raised all of them since they might stroll to in the future run the LVMH conglomerate.
The event was Mr. Arnault’s announcement that LVMH would supply 150 million euros (about $161 million) to sponsor the 2024 Paris Olympics. LVMH firms will play a starring position. Chaumet, a Paris jeweler whose shoppers as soon as included Napoleon’s spouse Joséphine, will design the Olympic medals, and Moët Hennessy wines will move in hospitality suites.
“The partnership will assist promote France all through the world,” Mr. Arnault declared. As tv cameras zoomed in, his eldest son, Antoine, the pinnacle of communications and picture for LVMH, uttered what may very well be a tagline for this enormous firm his father has constructed: “For a dream, there isn’t a value.”
It was a second of public triumph for Mr. Arnault, an indication of how embedded within the cloth of France LVMH has develop into. Over greater than 30 years, he has solid LVMH into the world’s largest luxurious group and essentially the most beneficial firm in France, with a presence in 81 nations. His manufacturers — 75 of them — are the celebrities of the posh world, together with Louis Vuitton, Christian Dior, Tiffany and Dom Pérignon Champagne. It has given him entree to prime ministers and presidents, and allowed him to amass a museum-worthy artwork assortment.
However his success has introduced challenges. In France, Mr. Arnault has develop into a lightning rod for anger over rising financial inequality. In April, 10 days after Forbes put him atop its annual listing of richest folks, protesters stormed his workplace in Paris throughout nationwide strikes over elevating the retirement age. His effigy was burned as a logo of capitalist evil.
Mr. Arnault’s 5 kids have been taught in France’s greatest faculties and raised to take management posts within the enterprise, however his dream of protecting LVMH within the household might drive him to raise one above the remainder.
And in latest months LVMH’s inventory has taken a beating, down 19 p.c since hitting a excessive in April. The corporate reported a dip in U.S. gross sales within the second quarter, and the Chinese language economic system, an enormous supply of LVMH’s income, is faltering.
The falling shares imply that Mr. Arnault (now price about $195 billion, Forbes says) dropped to the second-richest individual on the earth in June, eclipsed by Elon Musk. This month, LVMH was changed as Europe’s most useful firm by Denmark’s Novo Nordisk, the maker Ozempic and Wegovy, the vastly in style medication getting used for weight reduction.
At 74, Mr. Arnault has been working to ensure his firm — created by gobbling up many European luxurious homes that had been weakened by bickering household homeowners — will keep firmly in his household’s palms, secure from company raiders like himself. Final yr, he persuaded the board to lift the necessary retirement age for the chief govt and chairman to 80, from 75, and created a company construction that ensures the household’s management of LVMH, locking in his kids — every of whom has been named to extremely seen positions inside the firm — because the chief resolution makers.
Mr. Arnault has broadened LVMH past extravagant playthings into the world of experiences, buying over 50 grand accommodations and resorts. And with the Olympics deal, he has prolonged his tentacles extra deeply into the world of sports activities.
Mr. Arnault’s adjustments imply he doesn’t should retire subsequent yr as initially anticipated. That hasn’t stopped hypothesis about whether or not he can be certain that his heirs — who gown in virtually an identical Dior navy fits (save for Delphine, his one daughter, who usually wears Dior skirts) — keep away from a “Succession”-like drama.
The French media is stuffed with headlines evaluating the Arnaults to the Roys, the fictional household within the HBO collection. There are TikTok movies explaining why the Arnaults are “the true ‘Succession’ household.” The household hates this speak, and takes pains to minimize parallels to the present.
The eldest sibling is Delphine, 48, chairman and chief govt of Christian Dior Couture and a member of the LVMH govt committee and its board. Antoine, 46, shouldn’t be solely accountable for the group’s picture and sustainability efforts however chief govt of its males’s put on model Berluti, chairman of the Italian luxurious home Loro Piana, chief govt of Christian Dior S.E. and a member of the LVMH board. Each are from Mr. Arnault’s first marriage, to Anne Dewavrin. The youngest three are from Mr. Arnault’s second marriage, to Hélène Mercier, a Canadian live performance pianist: Alexandre, 31, is govt vice chairman of product and communications at Tiffany; Frédéric, 28, is chief govt of Tag Heuer; and Jean, 24, is Louis Vuitton’s watch director.
In a uncommon interview in LVMH’s discreetly lavish headquarters in Paris — this text is the primary for which Mr. Arnault and his kids have agreed to speak on the document to a global newspaper — Mr. Arnault disregarded any comparability to tv’s Roys with a wave of his hand.
“It’s not an obligation, nor inevitable, {that a} child is my successor,” he stated, leaning again in a buttery leather-based chair at a spherical desk in his non-public convention room. On one wall was a Picasso; on two others, Warhols. His son Antoine, in his position as picture gatekeeper, sat throughout the desk.
Mr. Arnault was sporting a white shirt, a blue tie, a navy jacket and black slacks, although nowadays he’s normally with no tie, Antoine stated, a part of a extra informal uniform that has accompanied new efforts to interact with the surface world. The kids have been instrumental in pushing their father to be extra open in regards to the conglomerate.
“The perfect individual contained in the household or exterior the household ought to be in the future my successor,” Mr. Arnault continued. “However it’s not one thing that I hope is a duel for the close to future.”
Nonetheless, legacy is clearly on Mr. Arnault’s thoughts. He grew up in Roubaix, as soon as a booming textile middle in northern France, and watched household industrial dynasties collapse as kids or grandchildren took their eyes off the enterprise or squandered inheritances.
“After one or two generations, it broke down as a result of that they had it too simple,” he stated. It was a mistake he vowed to not make along with his personal kids. “I didn’t need them to begin going to large events,” Mr. Arnault stated. “I made them work.”
Enterprise on the Eating Desk
Each month, the 5 siblings meet with their father over lunch on the highest flooring of LVMH’s headquarters.
For an hour and a half, they talk about enterprise, together with funds, the curve of the bracelet on a brand new €50,000 Vuitton watch, upcoming product introductions and the social media payoff of over-the-top occasions. For instance, a Vuitton males’s put on present by the model’s new designer, Pharrell Williams, shut down Paris’s Pont Neuf and attracted such names as Kim Kardashian and LeBron James, leading to over 16 million YouTube hits.
“Make no mistake,” Jean stated. “We talk about issues, however on the finish, it’s he who decides.”
Amid the bonhomie, the siblings say, Mr. Arnault is gauging how every of his kids is measuring up.
A graduate of France’s elite École Polytechnique, Mr. Arnault honed his kids’s math abilities almost each night time earlier than dinnertime. Antoine recalled that getting something lower than an ideal grade on necessary exams “wasn’t acceptable.”
Jean jokes about having “24 years of expertise, as a result of each lunch and dinner was at all times about work.”
Ian Rogers, a former chief digital officer at LVMH, stated Alexandre had informed him, “My enterprise training began after I was 9, on the breakfast desk.”
By age 10, Delphine was accompanying her father to Dior shops. He has made weekend inspections of LVMH properties in Paris along with his kids a routine for greater than three a long time. Alexandre stated: “I bear in mind, age 7, pondering, ‘Why is he doing this, and why is he asking the identical query to the identical salesperson, each Saturday of the yr?’”
The daddy paired every of his kids with a mentor as they entered the enterprise, to show them the manufacturers and monitor their efficiency. Delphine and Antoine began in novice positions (Delphine bought Dior fragrance at age 17) earlier than ascending to the C-suite. The three youngest moved extra shortly into senior roles, “most likely as a result of he feels time is operating out and he wants to hurry up the method of studying,” stated Pierre-Yves Roussel, a former chief of the LVMH vogue group and the present chief govt of Tory Burch.
All of them perceive that the household itself is now as a lot a model because the manufacturers they personal, and have wasted no time making their presence identified.
In lower than two years at Tiffany, Alexandre helped seal a take care of Beyoncé and Jay-Z, making a social media sensation. (In 2016, Alexandre persuaded his father to accumulate Rimowa, a German maker of aluminum suitcases, which was based in 1898. He instantly set about making the utilitarian baggage firm cool.) Delphine created the LVMH Prize for Younger Style Designers, a high-profile expertise competitors. And Antoine has thrown large the beforehand closed doorways of many LVMH firms with a collection of “open days” that invite the general public inside factories and workshops.
Their father by no means compelled them to hitch LVMH, the kids stated. Even so, Frédéric stated, “he discovered a solution to make me need to give my life to the household enterprise like he did.” (Kids from each marriages grew up vacationing collectively, and have been raised to play tennis and piano — their father’s favourite pastimes.)
The clan has gotten larger after two glamorous marriages: Antoine to the mannequin and philanthropist Natalia Vodianova, and Alexandre to Géraldine Guyot, who has an equipment model, Destree, that’s unbiased of LVMH. Delphine’s companion is a digital entrepreneur and billionaire, Xavier Niel.
When Alexandre wed Geraldine in Venice in 2021, company included Beyoncé, Jay-Z and Roger Federer (who often performs tennis with Mr. Arnault). His three brothers have been groomsmen. They share a household group chat, wherein they swap child footage.
“I do know it’s disappointing for lots of people,” Antoine stated, “however we really hit it off.”
The iPhone vs. Dom Pérignon
Mr. Arnault was born right into a development firm run by his father and based by his grandfather, who took him to constructing websites when he was 7.
When Mr. Arnault was 28, his father handed him the keys to the enterprise. He refocused it on actual property, and shortly after moved to New Rochelle, N.Y., to broaden in an atmosphere friendlier to entrepreneurs than socialist France.
It was the period of the company raider, and Mr. Arnault soaked within the extra aggressive strategy to mergers and acquisitions. When he returned to Paris at 35, after a fairly unsuccessful run creating condominiums in Palm Seashore, Fla., he got here again as a barbarian on the gate — and with a brand new thought: A New York cabdriver had informed him that he didn’t know the identify of France’s president, “however I do know Dior!”
Because it occurred, the French authorities needed to unload a bankrupt textile conglomerate that included Dior. Mr. Arnault purchased it for 1 franc, fired 9,000 folks and discarded every little thing besides Dior, which he then used to assist finance a brutal takeover of LVMH, a bunch just lately shaped from the bags maker Louis Vuitton and the Moët Hennessy Champagne and cognac home.
The battle for LVMH made his status. Enlisted by Henry Racamier, one in every of LVMH’s founders, to purchase shares and stop one other group from gaining management, Mr. Arnault did as he was requested, however didn’t cease. He in the end turned the tables, seized management of LVMH and compelled out Mr. Racamier, who stated on the time, “We want to discover a modus vivendi, nevertheless it’s exhausting with an individual like that.”
His fashion despatched shock waves by the clubby world of French enterprise, the place he turned often known as “the Wolf in Cashmere.” It was the start of a three-decade spree of empire constructing. He pursued family-owned manufacturers identified for craftsmanship and magnificence: Pucci, Fendi, Celine, Loro Piana. Some have been completely happy to be purchased out; some weren’t. Losses have been uncommon: Gucci and Hermès slipped by his fingers after ugly public battles.
Throughout Mr. Arnault’s takeover of Tiffany in 2020, because the pandemic harm earnings, he was accused of enlisting the French authorities’s assist to delay the deal’s closing, and in the long run gained a reduction on the negotiated value. (At $16 billion, it stays the posh sector’s largest deal.)
He has expanded LVMH into luxurious hospitality in recent times. LVMH’s holdings embrace the Cipriani resort in Venice, the Orient Categorical prepare and the “21” Membership in New York. There are eating places in flagship shops for Tiffany and Dior, and a brand new four-story Moët cocktail bar in Paris.
Mr. Arnault’s bets have normally paid off. Luxurious, in all its varieties, has been one of the crucial resilient investments on Wall Road within the final decade.
“He was at all times saying, ‘The iPhone is nice, however who is aware of if we shall be utilizing an iPhone in 10 years?’” Mr. Rogers, the previous chief digital officer, stated. “‘Whereas I do know folks will proceed to drink Dom Pérignon.’”
“We’re like Henry Kissinger,” Mr. Arnault stated. “We aren’t there to agree or disagree on the political facet of the nation wherein we’re doing enterprise.”
‘They Must Discover a Sort of Enemy’
Mr. Arnault insisted repeatedly through the interview that his important aim was not income. “It’s desirability,” he stated, “and we should make it possible for in 50 years we’re nonetheless on the prime.”
“Desirability,” stated Mr. Roussel, the previous LVMH govt, is the most well-liked phrase on the firm. However it highlights a possible drawback, he stated: “A client waking up and saying, ‘You recognize, I’m shopping for this product, however there’s somebody making a lot cash out of it.’”
“Is it fascinating that you simply’re shopping for a product from somebody who’s the richest man on the earth?”
That sentiment was not evident this summer time when Mr. Arnault visited China, one in every of LVMH’s most profitable markets. The “richest man” headlines from months earlier earned him a rock star’s welcome. In Shanghai and Chengdu, crowds adopted him and vied for selfies. Moms requested him to bless their infants.
“Just like the pope. Are you able to imagine that?” he stated. He was referred to as, he stated with fun, “the God of Fortune.”
However again residence, the place ardour about social and monetary inequality stretches again to the French Revolution, Mr. Arnault is a divisive determine: hailed by the enterprise and political worlds for constructing France’s largest company titan, and reviled by others for his virtually unimaginable wealth.
For a household that tries to maintain its fortune discreet, the “richest man” rating this yr nonetheless brings an unwelcome highlight.
“The eye that you simply get whenever you’re on the highest of that listing,” Antoine stated, “you may’t actually put together for that.”
In April, as France’s raucous nationwide protests gathered steam over President Emmanuel Macron’s bid to lift the retirement age two years to 64, demonstrators broke into the LVMH headquarters, lighting smoke bombs and denouncing Mr. Arnault because the embodiment of the ultrarich.
“He’s a logo of what’s mistaken on this society!” one shouted. Others carried indicators displaying Mr. Arnault as Mr. Monopoly in a prime hat, with accusations that he evaded taxes, exploited staff and laid off 1000’s to construct energy and wealth.
This month, when Mr. Arnault introduced that the Arnault household would donate €10 million to Restos du Coeur, a meals financial institution, critics stated it was a drop within the bucket.
“They should discover a sort of enemy,” Mr. Arnault stated. “France shouldn’t be a rustic which is motivated by enterprise success, in contrast to the US.”
When his good friend Warren Buffett walks round Manhattan, Mr. Arnault added, “he’s like a Beatle.” However when Mr. Arnault visits his shops in France, “I’ve to watch out,” he stated. “I don’t like this, however I want bodyguards.”
Antoine has suggested his father to push again, and nowadays Mr. Arnault stresses the corporate’s financial contributions: a whole bunch of 1000’s of jobs created worldwide, €5.5 billion paid yearly in French taxes, and huge sums for artwork and tradition, vitality sustainability, scientific analysis, sports activities and youths.
Who’s Subsequent?
What nobody debates is that Mr. Arnault understood, earlier than virtually anybody else, luxurious’s potential as a generator of revenue — that creating stunning issues is about aspiration and belonging.
The query now could be who can hold desirability on the coronary heart of LVMH in an age of protests and world financial uncertainty.
Final yr, Mr. Arnault tinkered with the company construction of his empire, concentrating decision-making along with his 5 kids. Every has a 20 p.c stake, they usually can’t promote their shares for 30 years with out unanimous board approval.
His heirs “have been schooled by the very best participant on the earth: All of them know the enterprise,” stated Sidney Toledano, head of the LVMH vogue group and one in every of Mr. Arnault’s longest-serving executives. “Are they going to be the pilots? Perhaps.”
If the subsequent chief govt shouldn’t be named Arnault, the kids say they’re OK with that. In spite of everything, Alexandre stated, “there’s the chance that none of us is ready to run the enterprise in addition to he has.”
The siblings are starting to debate how they’ll increase their very own kids with the identical sense of obligation that was instilled in them, Delphine stated. Mr. Arnault has begun taking her elementary-school-age daughter on his weekend rounds of shops.
However Alexandre added: “By the point they attain ages the place they’ll have duties, my father will nonetheless most likely be C.E.O. of LVMH. He’ll be 110 years previous.”
