LVMH: Louis Vuitton Seoul

Louis Vuitton, Moët & Chandon and Hennessy [LVMH] reported 2023 year-end sales of 86.15 billion euros [$93.46 billion], representing a 10% organic increase in fourth quarter and a 13% organic growth yearly increase against 2022.

Profit from recurring operations stood at €22.8 billion for 2023, up 8%. The current operating margin remained stable with respect to 2022. In addition, LVMH has advised the markets that it anticipates no further price increases across its business units in 2024.

Andrea Felsted’s Breakup LVMH Proposal Called ‘Inappropriate’ by Bernard Arnauld

The Bloomberg op-ed by Andrea Felsted, who earlier in the week speculated that LVMH should be broken up into 4-5 separate companies to maximize shareholder value, on Friday summed up financial reality in the luxury sector: “LVMH Pops the Moet While the Rest of Luxury Struggles”.

The wine and spirits division of LVMH was the only business to experience a sales decrease in 2023, so perhaps another metaphor than “popping the Moet” is preferable, when we’re talking financial results. LVMH wine and spirits sales fell from €7.099 billion [US$7.604bn] in 2022 to €6.602bn [US$7.156bn] in 2023, representing a 4% organic revenue decline [7% on a reported basis].

The typically calm, focused, informed and financially-responsible chairman and CEO of the world’s largest luxury goods and services company had been sending signals for weeks that Thursday’s year-end financial report would meet expectations and probably exceed them.

LVMH: Pucci

LVMH chairman Arnault barely raised an eyebrow over Felsted’s earlier opinion, accompanied by a Bloomberg blast headline on Apple News: “Is It Time to Break Up Luxury Behemoth LVMH?”

Chairman Arnault did respond to her op-ed when questioned by a reporter.

“I can’t consider it under any circumstances. I find it completely inappropriate,” Arnault said of the suggestion to split up LVMH. “If our financial services are dynamic enough, we must significantly increase our price-to-earnings ratio without any spin-off, because that would be a mistake, since the group is built precisely on this diversity of brands.”

Bernard Arnault Assures Us He’s Not Going Anywhere

Felsted seemed to be preoccupied in her strategic analysis by the ongoing speculation of which sibling will take control of LVMH. By breaking up LVMH into different sectors, there’s one for any child, who wants a CEO’s job, was her conclusion.

I seriously doubt that this is the basis for Bernard Arnault’s financial decision-making, even if he has proposed two more of his children to take seats on the LVMH Board of Directors. Arnault has said that when focused on Louis Vuitton and Christian Dior, he is heavily influenced by Steve Jobs and Warren Buffett.

LVMH: Tiffany & Co

Alexandre and Frédéric Arnault To Join LVMH Board of Directors

Alexandre, Executive Vice President of Product and Communications at Tiffany & Co, and Frédéric, head of LVMH's watches division will join their siblings Antoine Arnault and Delphine Arnault on the LVMH BOD, alongside French businessman Henri de Castries. The next annual general meeting of LVMH will be held on April 18.

Antoine Arnault is the chairman of Loro Piana, former chief executive of Berluti and head of communications and image at LVMH. Delphine Arnault, one of two heirs-apparent in the LVMH family business, is chief executive and president of Christian Dior. Previously Delphine served as chief executive and president of Christian Dior.

AOC believes that it’s not an absolute certainty that a family member will replace Bernard Arnault, who assures the business world that he’s not going anywhere soon. There’s a wild card in the mix, in AOC’s opinion. What is a fact is that Bernard Arnault has planted a family garden with few thorny bushes.

Now that he is back to being the richest man in the world, thanks to a 12% rise in LVMH’s stock price on Friday, Arnault’s practice of engaging his children in collective conversations around every aspect of the entire LVMH business over Zoom lunches — early breakfast in New York — reminds us that the family is not a Rupert Murdoch-like clan of cannibals.

LVMH: Dior Paris

They have been groomed to listen to each other’s brand visions and implementation strategies, in a series of ongoing debates about even the small brands in the LVMH portfolio. Arnault believes that nurturing those smaller brands is an equally important aspect of his financial management strategy. There must be some sibling rivalries in the LVMH big house, but every member of the family understands that they represent one of the world’s greatest concentrations of executive marketing, design and retail talent ever produced in one generation.

2024 Financial Forecast

Referring to LVMH’s role as a Premium Partner of the Olympic & Paralympic Games Paris 2024, a privilege the group paid $166m to acquire, Arnault is very positive about the year ahead.

It promises to be an inspiring, exceptional year for us all, featuring our partnership with the Paris 2024 Olympic and Paralympic Games, whose core values of passion, inclusion and surpassing oneself are shared by our Group. For LVMH, it provides a new opportunity to reinforce our global leadership position in luxury goods and promote France’s reputation for excellence around the world.

LVMH: Belmond Safaris Africa

Leaning in to Discuss LVMH 2023 Achievements

There are many parts of the LVMH 2023 year-end report that will never see a single paragraph on a website. AOC wants to call out some very impressive information on non-financial issues over the coming days.

The LVMH performance may remain unique to LVMH in the luxury sector. Kering is taking a notably different strategy in their brand portfolio management. The LVMH conglomerate already owns Loro Piana, but there are other luxury brands like Brunello Cucinelli that are also on fire, reporting a 15.9% increase year-on-year.

Kering is due to report full-year results on Feb. 8, and Hermès International on Feb. 9. Burberry has already lowered expectations around their 2023 results.