Arnault is best known for transforming the once nearly defunct LVMH into a multi-billion dollar … [+]
In 2022 Bernard Arnault reclaimed the title of the world’s wealthiest individual for the fourth time. The French billionaire is the founder, chairman and CEO of the luxury goods company LVMH, the owner and CEO of Financière Agache SA, Groupe Arnault (family office) and backer of the venture capital firm Aglaé Ventures.
Bernard Arnault is noteworthy due to his extraordinary business acumen and remarkable achievements. However, from a family office point of view, his unique management style and how he has successfully positioned his family office and empowered the next generation to continue the Arnault family legacy sets him apart from his peers.
Management style as the differentiator
Arnault is best known for transforming the once nearly defunct LVMH into a multi-billion dollar powerhouse that has become the world’s largest luxury goods conglomerate, comprising over seventy brands and covering a wide range of product categories. A mastermind at stirring up desire in the most selective consumers, Arnault’s unique ability to harness the creativity that drives growth and profit is unprecedented.
While many of his peers may seek a more predictable growth path, LVMH is renowned for radical innovation and Arnault for not limiting this process. Artists are unfettered by financial and commercial concerns. This, Arnaut believes, is vital for producing their best work. No inspiration is checked, and no spirits are crushed. The seemingly outlandish suddenly makes perfect sense and is quickly turned into profit.
Arnault believes that with certain techniques, everybody wins – the designer, the company and the customer. These techniques include hiring those who understand that creativity and chaos often go hand-in-hand and are respectful enough of the process to handle it. Yet, when it comes to translating that creativity into products, discipline is the order of the day, and strict rules are applied to the planning and manufacturing process. Not many can master navigating these fine lines, which sets Arnault apart in all he does.
Moreover, Arnault’s governance principles, including decentralized decision-making centers, are applied to each entity within the LVMH group. This ensures that each company retains its identity while financing the growth of new brands.
Proactively positioning to protect the family office
In 2022 it was announced that Arnault had altered the legal structure of his family office, Financière Agache SA, to a joint-stock partnership. The intent is to protect himself from dangerous takeover bids and ensure enduring family control over the LVMH empire.
Financière Agache SA is managed by a team of professionals and works to ensure the family’s interests are served. It is also responsible for strategically managing the family’s investments and ensuring its wealth is used to its full potential. It is also the executor of the family’s philanthropic activities, ensuring these are carried out effectively. In his family office, Arnault created the ideal vehicle for the successful transition of the business to the next generation of the Arnault family.
Next-generation empowerment
Bernard Arnault is acutely aware of the vulnerabilities divisions can cause. It is these divisions that have awarded him victories in several takeover battles. In a series of calculated moves, Arnault has sought to prevent the same thing within his own family, laying the foundation upon which his empire will rest far into the future.
While Arnault has previously stated that “Retirement is not a word in my vocabulary,” each of his children is fully equipped and positioned within the company for when that day finally comes.
Arnault’s two sons, Antoine and Alexandre, have taken the helm of two of the most iconic companies within the conglomerate, heading Louis Vuitton and Rimowa, respectively. His daughter, Delphine Arnault, is the executive vice president of Louis Vuitton and is the only daughter on the board of directors, a testament to the Arnault family’s commitment to the legacy of their businesses and their interest in furthering the success of the LVMH group as a whole. Her position of influence within the group speaks volumes of her ambition and acumen in luxury fashion.
Arnault’s commitment to passing the business on to his family is a testament to his desire for the company to remain a successful and influential leader in the luxury goods space. The new joint structure is designed to prevent division and puts the family office and concerns in a strong position for the future, where it will become even more influential.