Bernard Arnault could remain at helm of LVMH until he’s 80
Seventy-three year-old LVMH CEO Bernard Arnault could remain at the helm of the luxury goods group until he reaches 80, suggesting that there’s no immediate heir in the offing.
According to Lisa Jucca, writing in Reuters this week, and citing company filings, LVMH is looking to raise the age limit for the position of chief executive to 80 at its shareholder meeting next month.
As Jucca points out, that allows Arnault, born in France on 5 March 1949, to serve another two terms at the top of the luxury goods conglomerate, which owns wine, Champagne and spirits brands, along with fashion labels, jewellery and watches.
It’s noted that investors are likely to welcome the news, with LVMH shareholders enjoying 14% in annual total returns against an average of 3% (offered by the STOXX Europe 600 Index), since the French businessman took over the group in 1989.
However, Jucca adds that the call for an extension to Arnault’s retirement age suggests that there’s no obvious successor currently in line for the top job at LVMH, which, it is thought, adds an element of risk for investors in the group.
Meanwhile, according to Fortune.com, the extension – if approved – will allow Arnault more time to choose which of his five children could replace him as CEO of LVMH.
All of them currently work for the group: Delphine Arnault (46) is VP of Louis Vuitton; Antoine Arnault (44) is head of communications and image at LVMH; Alexandre Arnault (29) is VP at Tiffany; Frédéric Arnault (27) is the chief executive at TAG Heuer, and Jean Arnault (23) is director of marketing and development for Louis Vuitton watches.
For now, an experienced hand at the helm of the group is deemed beneficial as the crisis in Ukraine worsens, and sanctions on rich Russians affect the revenue for luxury goods.
At the start of this month, LVMH announced that it was ‘temporarily’ closing all of its 124 stores in Russia.
However, Putin’s invasion of Ukraine will have little impact on Champagne sales in Russia, as shipments to the nation had already diminished.
Following the introduction of protectionist legislation in Russia in July last year, which declared that only domestically-produced fizz can be called Shampanskoye – Champagne in Russian – the majority of Champagne makers halted exports to the Soviet nation.
More recently, as db reported in October, LVMH achieved a 46% growth compared with last year, with the group claiming that it had almost completely erased the impact of the pandemic on sales in under a year.
In May 2021, db recorded that Arnault had put even more faith in the business he controls by purchasing €440 million (£375m) worth of shares in the company.
At the time, LVMH shares had surged more than 20%, making Arnault, then aged 72, the world’s second-richest person after Amazon’s Jeff Bezos.
Arnault is worth $162 billion according to the Bloomberg Billionaires Index.