Bernard Arnault, the 76-year-old head behind LVMH, faces one of the greatest challenges of his term at the top of the world’s largest luxury group.
Against the background of falling demand in China, geopolitical trade conflicts in the United States and increasing internal complexity, LVMH has lost over 220 billion euros in market value since its high last year, Bloomberg reported. The extensive empire of the group, which includes 75 brands from Louis Vuitton to Moët Hennessy, shows signs of stress. The latest difficulties with Dior, Louis Vuitton and the wine and spirits division open vulnerabilities. For investor: Inside, the lack of a clearly formulated follow -up plan increases the concerns.
While the fundamental data of LVMH remain robust with 10.5 billion euros free cash flow and falling debts, according to Bloomberg, the group structure and the inconsistent brand performance are critically questioned. Hermès, once a takeover destination by Arnault, has now replaced LVMH as the most valuable company in France.
Key brands such as Dior, now under the direction of Arnault’s daughter Delphine, and Moët Hennessy, led by his son Alexandre, develop below average. A recently carried out restructuring of management and renewed speculations about outsourcing underline a group in change. Although Arnault has increased the age limit for CEOs to 85 years and positioned Stéphane Bianchi as a potential successor, the lack of a clearly defined follow -up plan in connection with the increasing operational complexity of a diversified luxury portfolio leaves even experienced investors with open questions.
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