LVMH - The Luxury Goods Conglomerate

[GRCF]

Bernard Arnault extend the age limit before retirement so, he is still there.
I don’t think that Antoine has proved himself from a business/strategic perspective for the big position.
Berluti and Loro Piana are successful and profitable the biggest brands in the group have now had the imput of Delphine.

For me Delphine has all the advantages in her hand. The experience, the discretion, she is good with talents and having a billionaire husband linked with new technologies is also a plus. She is the one that has been the longest involved with the group…Going back to Dior in the Galliano years.

Antoine is good with communication, philanthrophy.

I also think that it would be a strong signal to have a woman at that position.

Anyway, everybody in the fashion industry, in that sphere of business and even more in Paris knows that Delphine is far more superior to her brothers.

Oh 100% Delphine is superior to her brothers in every way and my vote would be for her as CEO of LVMH. I’m sure Antoine is certainly getting a promotion, of course not replacing his father, but it’s fun to speculate what his new role within the group will look like.

 

[Nimsay]

I just went to buy brut champagne for the rest of the long weekend…. I got home and looked at my outbound gift boxes… LVMH has truly cornered the luxury good market. They own such staple brands like Moet and Dior its like how can you not deal with them…

Yesterday i ran to the mall bc i needed the ca to rewrap a gift for me - the bag box was broken when it was delivered. Anyway the lines at LV were long and the amount of people in the mall with LV shopping bags was high….

At the liquor store i was surprised to see the Veuve Cliquot Rich was sold out. The M&C Nectar Imperial Rose was too. I got the last of the Nectar Imperial.

LVMH is cleaning up on every avenue.

 

[Abracai]

I just went to buy brut champagne for the rest of the long weekend…. I got home and looked at my outbound gift boxes… LVMH has truly cornered the luxury good market. They own such staple brands like Moet and Dior its like how can you not deal with them…

Yesterday i ran to the mall bc i needed the ca to rewrap a gift for me - the bag box was broken when it was delivered. Anyway the lines at LV were long and the amount of people in the mall with LV shopping bags was high….

At the liquor store i was surprised to see the Veuve Cliquot Rich was sold out. The M&C Nectar Imperial Rose was too. I got the last of the Nectar Imperial.

LVMH is cleaning up on every avenue.

I have a friend who is a top Lvmh executive. I will suggest you as head of marketing communication

 

[Abracai]

In Italy Veuve Clicquot was at 35€ in 2019. It now cost 49€. Shelves of those are currently full like never before probably because here people can spot the difference between over rated, mass produced, over priced wines and good nectars.
There are Premier Cru and Grand Cru at 35€. Spending 50€ for a low standard champagne like Veuve Clicquot or 60€ for a Moet Chandon when you find a Jacquesson for 70€ really is nonsense.

 

[Nimsay]

VC Yellow Bottle Brut is such an odd brand because in Europe it is extremely tacky - but in America it is not. Here is viewed as upper middle. In America VC YBB is good quality well priced champagne. There really is no competitor for it in the US. American Sparkling Wines around that money dont even compare to the amazing consistency of VC. VC YBB has tasted the same for like a decade. Thats crazy in the world of champagne. In my life experience; consistency is what people will pay the most for.

 

[style_expert]

I was reading an interesting interview with Enzo di Sarli and one of his 'predictions' was LVMH snapping up Ralph Lauren at some point in the foreseeable future. There were some talks last year but no movement.
At this point, I think LVMH will snap up anything good they can get their hands on. I think there is a lot of growth potential for Ralph Lauren so curious to see how it unfolds.

 

[Nimsay]

LVMH is struggling with Tiffany. They dont know how to renovate American brands without turning them into European duplicates

 

[KaKe]

conglomerates like LVMH have destroyed fashion and the world.

 

[NYLA22]

at the end of the day the world is bad because most people are bad.

This has been a brutal realization for me since 2016 lol.

 

[Nimsay]

Back onto my LVMH admiration ….


Today shopping at carolina herrera for NYE options. my friend is like 75… CH materials are sublime the construction is 1950s couture-style, straightforward with not a lot ot seams. Anyhoo they ended up giving her like 4 different receipts, one receipt had to come by email. The receipts were all different sizes and stapled together. It was very mom and pop for a premiere designer.

These are the things LVMH just does so correctly…. They have weighty envelope receipts that are like little booklets. If you have multiple receipts they fit together like their own little pochette and take up no more space than one receipt. That is like what youre paying for when you pay 1k for an LV teddy bear.

 

[GRCF]

I think there is a lot of growth potential for Ralph Lauren so curious to see how it unfolds.

I feel like RL has stagnated and it is not the American institution it once was. I don't think it holds enough 'desirability' that Bernard is always going on about, at least not anymore. Everything is made in Central America, if you think luxury that's not what you want. The crowd LVMH aims for does not care about RL, though it might be another opportunity for Alexander to partner with Supreme and Nike, so there's that. Maybe make Pharrell it's creative director, we get a spectacle down the Brooklyn Bridge, make RL great again.


I actually think LVMH should trim down their brand portfolio, instead of acquiring more or at least do it more thoughtfully. I think Tiffany was great on paper, but has been poorly executed (Lauren at the Puck might disagree).

Anyway, Bernard was recently elevated to the order of the Grand Croix in the Légion d'honneur to further enlarge his big head. I am anxiously awaiting the Delphine years (not being sarcastic).

 

[LadyJunon]

I think that an issue LVMH has is their homogeneity. Lots of their smaller brands feel like smaller versions of Louis Vuitton/Dior with the only brands standing out in terms of vision, offering and strategy being Celine (Hedi being Hedi), Loewe (JWA being JWA) and Loro Piana (the quiet luxury aspect).
• Fendi is now Dior with extra steps
• Kenzo feels like Louis Vuitton Menswear with missing steps
• Givenchy is a directionless mess
• Berluti is rotting away in the background
• Patou, Pucci and Marc Jacobs are the same brand in different fonts

Kering might be a corporate nightmare, but I give Pinault props for making their brands are very distinct from each other.

 

[Drusilla_]

honestly it's madness to see how sharply Givenchy fell off after Riccardo.

also Marc Jacobs in the same breath as Patou and Pucci? I hate that Heaven stuff as much as the next person with eyes but Marc's stuff isn't in any way similar to the others.

 

[GRCF]

• Fendi is now Dior with extra steps
• Kenzo feels like Louis Vuitton Menswear with missing steps
• Givenchy is a directionless mess
• Berluti is rotting away in the background
• Patou, Pucci and Marc Jacobs are the same brand in different fonts

And most of these brands I would get rid off because they lack the qualities that you mention: vision, strategy, offering, desirability.

Givenchy has gone off the rails, but with the right designer it can be saved, but I feel like the suits at LVMH have no interest in saving it. Are there any rumours of who might replace Williams?

Kenzo feels like a childish version of Supreme.

Patou, Pucci, and MJ are all different brands to me and they still don't make sense. This is my problem with LVMH, there does not seem to be a cohesive strategy in what maisons they invest in other than let's buy them before Kering or anyone else does. I think it all started as a dick measuring contest and then they lost interest. But, it's not my money to waste.

 

[style_expert]

I think that an issue LVMH has is their homogeneity. Lots of their smaller brands feel like smaller versions of Louis Vuitton/Dior with the only brands standing out in terms of vision, offering and strategy being Celine (Hedi being Hedi), Loewe (JWA being JWA) and Loro Piana (the quiet luxury aspect).
• Fendi is now Dior with extra steps
• Kenzo feels like Louis Vuitton Menswear with missing steps
• Givenchy is a directionless mess
• Berluti is rotting away in the background
• Patou, Pucci and Marc Jacobs are the same brand in different fonts

Kering might be a corporate nightmare, but I give Pinault props for making their brands are very distinct from each other.

Totally! They need a much more tailored approach and a much more targeted and better defined client in mind for these smaller brands. If positioned better, these other brands can appeal to clients who are not interested in a Dior or Vuitton. LVMH is not so successful in nurturing and developing these smaller brands, maybe with the exception of Moynat.
What they've done with Givenchy and to a lesser extent with Fendi recently is incomprehensible!
I don't see a lot of potential for Kenzo and Marc Jacobs in the future. Patou they should have never started with in the first place. Pucci can be saved but it needs to happen very soon.

 

[NYLA22]

• Berluti is rotting away in the background

There is probably a thread about this already, but why did Kris Van Assche get the boot from Berluti? Was it just not performing? They wanted to take it in a different direction? It feels like a very confused brand now, without a creative director.

 

[Abracai]

I feel like RL has stagnated and it is not the American institution it once was. I don't think it holds enough 'desirability' that Bernard is always going on about, at least not anymore. Everything is made in Central America, if you think luxury that's not what you want. The crowd LVMH aims for does not care about RL, though it might be another opportunity for Alexander to partner with Supreme and Nike, so there's that. Maybe make Pharrell it's creative director, we get a spectacle down the Brooklyn Bridge, make RL great again.


I actually think LVMH should trim down their brand portfolio, instead of acquiring more or at least do it more thoughtfully. I think Tiffany was great on paper, but has been poorly executed (Lauren at the Puck might disagree).

Anyway, Bernard was recently elevated to the order of the Grand Croix in the Légion d'honneur to further enlarge his big head. I am anxiously awaiting the Delphine years (not being sarcastic).

Bernard is at least 10 times Delphine as a business leader. And after him it may really be a mess.
Sooner or later someone will question why Lvmh is the only player in the industry who don't provide margins for none of its brands.
For now playing catch up games with Hermès earnings using hidden sales on various brands and georaphical areas when needed and keeping on payroll most of magazines, newspapers, medias, influencers, pundits it's a strategy that works but it's not an easy one to execute.
We will also see if she will be able to maintain the same network and political protections that allow Lvmh to keep EU antitrust regulators at bay.

 

[Nimsay]

I was thinking that too. LVMH spends so much on Marketing. They really cannot afford to shrink at all. The regulation aspect is interesting bc I wondered that too.

I didnt even know LVMH had Berluti. I think they would be smart to part themselves out and drop brands like Berluti and Patou.

Due to the pressures of stockists and contracts LVMH is pretty much forced to sell whatever they can at Giv and other labels. The Giv stores have leases that will be paid regardless.

MJs little purse line has totally revived his brand - along with his perfumes the MJ name is fine. However he needs to be CD at like Fendi or Pucci… or both

 

[GRCF]

Sooner or later someone will question why Lvmh is the only player in the industry who don't provide margins for none of its brands.

Why don’t they btw? And why is not providing margins a good or bad strategy? Genuinely want to know.

We will also see if she will be able to maintain the same network and political protections that allow Lvmh to keep EU antitrust regulators at bay.

Great point. She’s definitely not the wolf in cashmere clothes, none of the children are. But I’m sure that aside from Toledano, a lot of Bernard’s lieutenants will still be around and lobbyists who can do the dirty work for her. Bernard is only as good as the people he surrounds himself with, as long as some of them stay around LVMH will be fine under her. If it was left to her brother’s though…

 

[Abracai]

Why don’t they btw? And why is not providing margins a good or bad strategy? Genuinely want to know.

Great point. She’s definitely not the wolf in cashmere clothes, none of the children are. But I’m sure that aside from Toledano, a lot of Bernard’s lieutenants will still be around and lobbyists who can do the dirty work for her. Bernard is only as good as the people he surrounds himself with, as long as some of them stay around LVMH will be fine under her. If it was left to her brother’s though…

Not providing margins is a good strategy to inflate shares price and to keep artificial growth. It is impossible to judge the quality of earnings without revealing your margins. You can declare your earnings grew by 15% but if that growth is the result of hidden sales and promotion the quality of that +15% is questionable because in the long run you slowly dilute the brand and in reality you're playing catch up games behind the best in class competitor.
Hermès is the best in class and they reveal their margins (like all players expect Lvmh). Lvmh don't provide margins and every quarter they casually grow at approx the same rhythm of Hermès.
Lvmh is an historical market analysts darling, the company spend billions on pr and promotions. They're in love with the "lvmh is a luxury etf" narrative they created. As long as things goes fine no analysts will pose any question or issue about it. When wind changes it can become dangerous.
Lvmh is so powerful in the sector and someone suspect they may have insiders infos on other brands hence act accordingly in terms of hidden promotions to artificially catch up with their competitors growth.
What Arnault created is a very complex structure, you need a beast of a CEO to keep this type of machine going. And you continuosly have to spend bilions on acquiring new brands (the more you have the more it become difficult to judge the quality of your growth and the more you have them at your disposal the more you can sell through promotions without market noticing it) and to grease press, analysts, regulators etc.
I work in finance and I know some investments banks would not even dare to release a bad report on the company for the fear of being black flagged and losing the chance of gaining fees on the next M&A move.
There is part of the press that wouldn't dare to criticise the company to avoid losing milions of revenue ads. I know an italian online journal specialized in leather that would not exists without the company funding. Not only they avoid to move any kind of criticism they literally create press campaigns against competitors.
Let's get this straight: in an entrepreneurial sense he's been a genius to build such a machine. It just will be difficult to run this at this level for someone else.