Bernard Arnault is denying a family rift—and any kind of real-life Succession. LVMH earnings tell a stranger story

As the world's largest luxury conglomerate, LVMH, continues to soar to new heights, a shocking revelation has sent shockwaves through the business community. In a rare public statement, Bernard Arnault, the 77-year-old chairman of LVMH, has vehemently denied any family rift or infighting among his five children, who are all poised to inherit his vast empire. But, in a surprising twist, the latest earnings filing of LVMH reveals a stark contrast to the family drama that has been making headlines.

Background & Context

Bernard Arnault is the mastermind behind LVMH, a conglomerate that comprises over 70 brands, including Louis Vuitton, Moët Hennessy, and Tiffany & Co. With a net worth of over $200 billion, Arnault's family is often compared to the fictional Roy family in the hit HBO series Succession. However, despite the media frenzy surrounding Arnault's family dynamics, the reality is far more complex.

The recent controversy began when French journalists Raphaëlle Bacqué and Vanessa Schneider published a six-part investigation, culminating in an explosive final installment that alleged a deep-seated rivalry among Arnault's children. The investigation claimed that Delphine, Antoine, Alexandre, Frédéric, and Jean are all vying for control of the empire, with some even going so far as to sabotage each other's efforts.

Key Details

However, in a bold move, Arnault took to the social media platform X to address the allegations head-on, releasing an open letter that racked up a staggering 4.5 million views in just 24 hours. In the letter, Arnault defiantly dismissed the notion of a family feud, stating that his children are "running houses, building teams, making decisions, and—sacrilege—calling each other on Sundays." He went on to describe the Sunday phone calls as "an intrigue," implying that the media's portrayal of his family is far from the truth.

But, in a surprising twist, LVMH's latest earnings filing reveals a different story altogether. The conglomerate's highest-performing segment is, in fact, the Watches & Jewelry division, which saw organic revenue grow by a remarkable 9% year-over-year, thanks in large part to the success of Tiffany and Bvlgari. This division is led by longtime executive Jean-Christophe Babin, who has been instrumental in driving growth and profitability.

Meanwhile, the Fashion & Leather Goods division, which is home to some of LVMH's most iconic brands, including Christian Dior and Louis Vuitton, has seen a decline in revenue and profit. The division's quarterly sales missed expectations by a significant margin, with JPMorgan's Chiara Battistini describing the results as the "first hint of a turn" in the company's fortunes.

What Experts Say

Morningstar's Jelena Sokolova, who covers LVMH, believes that Delphine is the closest of the five siblings to "the top of the pyramid." She notes that Delphine has taken on the role of CEO at Dior, a brand that has shown signs of improvement in recent months. "If she manages to accelerate the growth again, I think it would be kind of a testament to her abilities," Sokolova said in an interview.

The contrast between the LVMH earnings and the media narrative surrounding Arnault's family is striking. While the family drama makes for juicy headlines, the reality is that the company is being led by a team of experienced executives, rather than the next generation of Arnaults.

Key Takeaways

• LVMH's highest-performing segment is the Watches & Jewelry division, led by Jean-Christophe Babin.
• The Fashion & Leather Goods division has seen a decline in revenue and profit, with quarterly sales missing expectations by a significant margin.
• Delphine is seen as the closest of the five siblings to "the top of the pyramid" and is currently CEO of Dior.
• The media narrative surrounding Arnault's family is at odds with the reality of LVMH's business performance.

What This Means For You

While the drama surrounding Bernard Arnault's family may make for compelling headlines, the reality is that LVMH is a business led by a team of experienced executives. As investors and consumers, it's essential to look beyond the media hype and focus on the company's actual performance.

As the luxury industry continues to evolve, it's clear that LVMH is well-positioned to adapt and thrive. With a strong portfolio of brands and a team of experienced leaders, the company is poised to continue its success for years to come.