Bernard Arnault’s Succession Looms as LVMH Returns to Growth

What’s driving LVMH’s business?

LVMH’s portfolio spans more than 75 brands, including Louis Vuitton, Dior, Tiffany & Co. and Sephora. Its financial results are a closely watched gauge of the global luxury goods market, which Bain & Company expects to reach roughly $420 billion this year.

In a statement accompanying the results, Arnault attributed the second-quarter uptick to the strong debut of new Dior collections by creative director Jonathan Anderson, who joined the brand last year, the opening of new Louis Vuitton stores in Beijing and Seoul, and continued demand for signature jewelry collections at Tiffany and Bvlgari. He also cited growth at Sephora and a recovery in champagne and cognac.

The core Fashion & Leather Goods division, which generates nearly half of LVMH’s revenue, edged up 1 percent, reversing seven consecutive quarters of declines. Watches & Jewelry grew 11 percent, driven primarily by high-end jewelry sales at Tiffany and Bvlgari.

Regional performance reflected shifting economic trends. U.S. sales grew 6 percent in the quarter, up from 3 percent in the previous quarter. LVMH linked its strong U.S. performance in part to new wealth creation, with Reuters pointing to the A.I. boom. “Where wealth is created, consumer appetite for luxury and for our products in particular is strong,” LVMH CFO Cécile Cabanis told analysts during Monday’s earnings call.

Luxury brands still need middle-class customers

Analysts have questioned whether years of price hikes have placed many luxury products out of reach for middle-class shoppers. Cabanis said LVMH must serve “both the very exclusive client and the aspirational, because we need to continue to recruit.”

To sustain that appetite across client tiers, LVMH is balancing high-end offerings with more accessible entry points. Louis Vuitton’s Speedy P9 line, aimed at top-tier clients, starts at $9,450 and can exceed $15,000, with special editions priced even higher. By comparison, newer releases such as Squire bags ($2,470 to $2,860) and Multipass models ($2,230 and $3,350) target “aspirational” consumers, Cabanis said.

LVMH shares slipped 1.5 percent on Tuesday and remain down roughly 30 percent for the year, as analysts questioned whether the earnings numbers are sufficient to signal a broader turnaround. Bain & Company expects the global personal luxury goods market to grow just 2 to 4 percent this year.

The Arnault family tightens its grip

Arnault did not inherit a luxury empire. In 1984, he began building one when he took over the struggling Boussac group, then the owner of Christian Dior. After Louis Vuitton and Moët Hennessy merged three years later, he accumulated a controlling stake in the newly formed LVMH and became its chairman and CEO in 1989. Over the next three decades, he systematically assembled a portfolio, absorbing brands like Sephora, Fendi, Bvlgari and Loro Piana, culminating in the $15.8 billion acquisition of Tiffany & Co. in 2021.

The family’s equity control has consolidated further in recent years. As of June 30, the Arnaults held 50.21 percent of LVMH shares and controlled 66.39 percent of its voting rights.

To safeguard the group against external threats, Arnault restructured his family holding company, Agache, into a joint-stock partnership in 2022. Under the agreement, each of his five children—Delphine, Antoine, Alexandre, Frédéric and Jean—holds a 20 percent stake, according to regulatory filings. All five hold executive positions across key Maisons and operating divisions, with four serving on boards and two on the Executive Committee.

Their father, meanwhile, has shown little urgency to name a successor. Last year, shareholders approved a bylaw change effectively allowing Arnault to remain chairman and CEO until age 85. When a shareholder asked about succession at LVMH’s annual meeting in April, he suggested revisiting the question “in seven or eight years.”

That issue flared up publicly just ahead of earnings. On Sunday, Arnault issued a rare statement pushing back against a multi-part series in the French newspaper Le Monde examining his business empire, whose final installment alleged growing friction among his children. He dismissed the claims of a family feud, writing that luxury “is one of the rare sectors that thinks in generations rather than quarters.” His children, he wrote, “run Houses, build teams, make decisions.” Anyone “betting on a family rift to sell newspapers,” he added, would be “waiting for a long time.”

Balancing algorithms and artisanship

While the Arnault family maintains firm structural control, LVMH’s next phase hinges on balancing heritage with innovation: integrating technology into a business built on scarcity and craftsmanship. A.I. promises speed and scale, but those qualities can sit uneasily beside the slow, hands-on work that gives luxury goods much of their value.

That duality was evident across the quarter. In the earnings statement, Arnault pointed to Les Journées Particulières, an October event that will open the group’s normally private workshops and historic ateliers to the public, showcasing what he described as “the invaluable expertise of our craftspeople and the rich heritage of our Maisons.”

At the same time, digital tools are playing a growing role in creative and operational work. At VivaTech in June, Arnault said he takes part in weekly design sessions using generative A.I. to develop product concepts.

Across LVMH, A.I. is being used to improve client engagement, demand forecasting and product development, Cabanis said. She suggested the technology could also shorten time to market and lower inventory, creating efficiencies that can be reinvested. LVMH would not cut costs at the expense of client service, she added. Louis Vuitton designers are already using A.I. to test colors and visualize materials, while Sephora recently launched an app inside ChatGPT that offers U.S. shoppers product recommendations.