LVMH starts the year with a new Dior boss
The group owns some of the most luxurious brands such as Dior and Louis Vuitton and last year it really thrived despite the turbulence in the markets. Its strategic position was strengthened by the fact that founder Bernard Arnault became the richest man in the world, overtaking Musk, who lost a significant part of his fortune. What changes are happening in the company in early 2023 and how are its shares doing?
Strategic leadership changes
The company is known for putting family members in leadership roles, and this strategy has worked for them so far. It is for this very reason that Bernard Arnault has also currently appointed his daughter as director of the Dior fashion house. Thus, Delphine Arnault will vacate the position of LVMH's executive vice president for Louis Vuitton, which she has held since 2013, and will fill the executive position for Dior.
Under her, the luxury brand has achieved new sales records, LVMH said. Another change is the transfer of Dior chief Pietro Beccari, who will replace longtime Louis Vuitton executive Michael Burke.
LVMH is dedicated to selling premium products ranging from luxury watches, fashion and fragrances to Moet champagne goods. The key to their success appears to be succession planning for strategic positions.
The uniqueness of Bernard Arnault
We are talking about a member of a wealthy French aristocratic family who brought together world-famous brands of wine and spirits, fashion, clothing, perfume and cosmetics into one concern. Over more than three decades, Arnault created a luxury retail empire by helping to merge Louis Vuitton with spirits company Moët Hennessy and acquiring a controlling stake in the resulting holding company called LVMH.
Today, he already boasts the top spot on the list of the world's richest people. In addition, he is also an investor and has put his capital into, for example, Netflix. The market value of LVMH reaches almost $390 billion and during the first 9 months of 2022, it recorded revenues of almost $60 billion. The billionaire is also known to frequently control the retail locations of LVMH brands and their competitors. He has dedicated his life to maintaining and developing France's most iconic brands.
The company's position is relatively stable despite the turbulence on the world markets. The majority of the French billionaire's wealth is linked to LVMH shares, and since 2020, the company's share price has jumped by around 65% overall. LVMH shares have reacted to the appointment of Arnault's daughter to the leadership of Dior by rising by almost 2 % and about 13% since the beginning of the year.
LVMH's share performance over the last 5 years. (Source: Investing) *
Lucía Žárska, analyst of ProfitLevel
[*] Past performance is no guarantee of future results.
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