Digital Luxury Group & Luxury Society identified the 10-most-searched-for Luxury Leaders of 2014.
Leadership. It is perhaps one of the most-important yet least-discussed aspects of luxury brand management. Corporate culture has long been cited as a source of business success or failure, yet the luxury the industry remains largely silent on the internal strategies that keep its best-known brands moving forward.
Consider for one moment, the impact that one sole individual has had on the luxury industry, Monsieur Bernard Arnault. Whether one chooses to admire or admonish his aggressive approach, his influence is undeniable. He has effectively revolutionised the way that luxury brands are organised, marketed and sold, and the way in which luxury is understood.
Most of all he has created ‘star’ executives, just as he did ‘star’ designers and ‘star’ brands. These senior executives sit front row at fashion shows, nestled between industry heavyweights and celebrities, eventually moving from brand to brand in a dizzying display of executive musical chairs.
“ Bernard Arnault has revolutionised the way that luxury brands are organised, marketed & sold ”
Just has luxury has surpassed the attention of the audience that have the purchasing power to indulge, luxury brand executives have transcended the boardroom. It is Patrizio Bertelli, co-CEO of Prada, who can be found on the pages of New York Magazine, detailing the inner-workings of the architecturally-designed, Bertelli-compliant Prada universe.
It was former Burberry CEO Angela Ahrendts who featured regularly on the British brand’s YouTube channel, nestled between runway footage and perfume commercials, delivering dynamic presentations of financial results. Example?
Whilst the need for creativity and innovation is undeniable in luxury, with rapidly changing business conditions, intense competition and frequent economic headwinds, the role of the CEO has never been so important. Especially when the luxury industry continues to make itself a lot of money.
Patrizio Bertelli featured in New York Magazine © Andrea Frazzetta
It is easy to get lost in the downtrodden prose of executives who wish to focus on slowing growth in China or the negative impact of currency fluctuations. But at the end of the day, LVMH posted 2014 revenues of 30.6 billion euros, including 5.71 billion euros in profits. Luxury brands mean big business.
And when brands make money, so too do their executives, which in an era of renewed fiscal scrutiny inevitably generates column inches. Just recently Angela Ahrendts attracted a myriad of headlines – both in business journals and tabloids – when buried within a securities filing Apple let slip that her 2014 total remuneration package topped $73.3 million.
In almost the same week, Oxfam presented its concerns about income inequality in Davos, claiming that half of global wealth is now held by the wealthiest 1%. Further proof that luxury has transcended its position as an industry. Luxury today is a fiscal, ethical and political concern.
“ Luxury today is a fiscal, ethical and political concern ”
It is without surprise that Luxury Leaders have become as interesting to the business and consumer world as the brands themselves. As more and more luxury brands and groups become publicly listed, the more important the vision and strategic ability of their leader becomes to existing and potential shareholders.
So whom specifically does the world want to know the most about? According to Digital Luxury Group’s DemandTracker™ technology* Tesla’s Elon Musk was the most-searched-for CEO in the luxury industry in 2014, followed by Bernard Arnault, Miuccia Prada, Christopher Bailey and Antoine Arnault.
You heard correctly, a Canadian-American engineer with a vested interest in Space travel and electric automobiles generated more search intentions in 2014 than Monsieur Arnault, the industry’s own wolf in cashmere.
Top 10 Most-Searched-For Luxury Industry CEO’s
Elon Musk isn’t your quintessential luxury CEO. He has never revived a heritage brand or put billions of dollars on the negotiating table to acquire one. Electric car manufacturer, Tesla – just one of the companies where he serves as CEO – was created in 2003 in Palo Alto California. He is the CEO and CTO of Space Exploration Technologies Corporation and co-founded PayPal.
According to Musk’s original Tesla manifesto, its primary goal was commercialize electric vehicles, starting with a premium sports car aimed at early adopters and then moving as rapidly as possible into mainstream vehicles, rather like the consumer cycle of purchasing technology.
Unlike tech products, the distribution would be controlled by a model more frequently leveraged by luxury brands. Tesla to this day can only be viewed within directly controlled boutique ‘galleries’ and purchased – directly from the brand – online. Musk’s strategy is yet another confirmation between the blurring lines between technology and luxury, a la Apple.
“ Elon Musk isn’t your quintessential luxury CEO ”
2014 was an interesting year for Elon Musk. The inventor and entrepreneur made comments more than once that he felt Tesla’s stock was overvalued, causing its share price – and his personal net worth – to dip by almost 5%. Nonetheless by the end of 2014, Tesla was trading with a market capitalisation over $35 billion.
2014 was equally, if not more so, an ‘interesting’ year for fashion. Yet another year of profit warnings, abrupt departures, falling share prices and personal controversy. Fashion CEO’s accounted for one-third (34%) of the Top 100 most-searched-for luxury leaders, trailed by automotive leaders (20%).
Bernard Arnault (#2) made headlines more than once in 2014, finally agreeing to relinquish his ‘secret’ stake in Hermès and not buy any further shares in the company for the next five years. Just one month later, France’s second-richest resident unveiled the Frank Gehry designed Fondation Louis Vuitton in Paris, at a reported cost of $143 million.
Chairman and CEO of Kering, François-Henri Pinault, was the third most searched luxury leader. Some interest corresponds to his wife Salma Hayek, whose fame far transcends that of the luxury industry. The pair made headlines in March 2014 when they announced a move to London, insisting that it had nothing to do with the 75% tax on wealth in France, for executives earning more than €1,000,000 per annum.
“I want to clarify, it’s not for tax purposes,” explained his wife. “We are still paying taxes here in France. We think that London has a lot more to offer than just a better tax situation. François thinks London is very cosmopolitan.”
Few may realise that Miuccia Prada (#4) is not only the creative director of the brand that bears her name, but co-CEO of the Prada Group alongside husband Patrizio Bertelli, since February 2014. Unfortunately for the duo, searches related to her leadership position were no doubt linked to the brand’s forecast of slowed sales growth issued the following April.
“ Francois-Henri Pinault made headlines when he announced a move to London ”
And again boosted when the Italian tax authority launched an investigation into “the accuracy of certain past tax filings by them as individuals in respect of foreign-owned companies” in September. The executive duo has claimed that an agreement has been made with authorities.
Searches for Christopher Bailey (#5) increased by a whopping 51% in 2014 when compared to the previous year. It was the first year that Bailey served as both chief creative officer and chief executive officer, moving into the top spot following the departure of Angela Ahrendts. And the first time his remuneration came under public scrutiny.
In July shareholders rejected a £20m remuneration package for the designer, protesting 1.35m shares awarded to Bailey before he was named CEO in 2013. The shares were worth just under £20m at the time and were not tied to performance. The executive calmed the market somewhat in May, announcing there would be no change to Burberry’s strategy.
Overall men dominate not only the Top 5, but also the majority of the luxury industry’s leading positions. Of the top 100 luxury leaders of the study, only 14 are women and only two make the top 10: Miuccia Prada co-CEO of Prada Group (4th) and Delphine Arnault, Director and Executive Vice President of Louis Vuitton (9th).
“Although the men dominate the ranking, the proportion of women in CEO roles within luxury is higher than the proportion of women in Fortune 500 CEO roles," explains David Sadigh, Founder & CEO at Digital Luxury Group.
“In 2014, women only held about 5% of Fortune 500 CEO roles but they hold 14% in our Top Luxury CEOs ranking. Should Apple SVP Angela Ahrendts have kept her role as CEO at Burberry, she would have been the most searched for luxury woman leader and ranked fourth overall.”
Furthermore, Maureen Chiquet, Chanel’s CEO since 2007, was one of the executives who registered the largest increase in interest. Ranked at #33 online interest in Ms Chiquet rose at a higher percentage than interest for the Chanel brand in 2014. The CEO is one of the 10 founding corporate members of the Private Sector Leadership Advisory Council of the United Nations that focuses on women’s economic empowerment.
The study ranks over 500 luxury brands’ and groups’ Chief Executive Officers, Chairmen, Directors and Divisional Heads. This research is based on information derived from 8.5 million of online searches on the world’s top search engines.
*Top Luxury CEOs is issued in partnership with DLG’s Luxury Society division.