LVMH is a global luxury brands conglomerate founded in France in 1987 by Bernard Arnault. The Fashion Brands division of the group includes legendary brands such as Christian Dior, Louis Vuitton, Givenchy, Celine, Fendi, Loro Piana, Berluti, Pucci, Kenzo, Loewe.
LVMH has been the very first luxury conglomerate to set up a proper group strategy, beyond the single Brands development. Every Brand has its own precise positioning and identity and it should well integrate the Group portfolio.
Since 2006, sales and profits more than doubled reaching a peak in 2017 of 42.6 billion euros and 5 billion euros respectively.
Gucci is now owned by Kering, that ousted Domenico De Sole and Tom Ford, the real masterminds of the brand success in the early 2000s. The brand is living the greatest and fastest growth of its history, setting up a record among fashion labels and challenging the business law of gravity.
Fendi was acquired by LVMH and lived a very powerful revamp thanks to the ability of Michael Burke, one of the closest collaborators of Bernard Arnault, to blend part of the Fendi family, Karl Lagerfeld, previous and new managers in an unforgettable set represented by the city of Rome. The growth of Fendi has been driven afterwards by Pietro Beccari with a long term approach and steady but not crazy pace.
As the LVMH group is always evolving catching up with the times and lifestyle and trying to conquer different targets, it recently went through several strategic changes in its organization.
Sydney Toledano, the CEO responsible for the stunning growth of Christian Dior Couture left the helm of the brand after 19 years of continuous success. He was then appointed head of LVMH Fashion Brands division that includes Celine, Kenzo, Loewe, Marc Jacobs and Emilio Pucci.
Dior is now driven by Pietro Beccari, a valuable representative of the new generation of luxury top executives, and its collections are created by Kim Jones for the Men's, Victoire de Castellane for Women's jewelry and Maria Grazia Chiuri for the Women's.
Riccardo Tisci was replaced by Claire Waight-Keller at the creative direction of Givenchy. The British designer nailed the event of the year designing the wedding dress of Meghan Markle and making of Givenchy one of her go-to designer brands.
Phoebe Philo left fans inconsolable when she decided to withdraw from the fashion world for a while (recharging batteries for Chanel?) and lots of doubts surround Celine's appointment of Hedi Slimane in her place – the creator of the skinny, gender fluid, forever young outfits at Dior Homme before and Saint Laurent.
Virgil Abloh, the successful creator behind Off-White brand recently joined Louis Vuitton as Men's Creative Director, adding a precious piece in the brand designer puzzle, made by Nicolas Guesquière for the Women's and Francesca Amfitheatroph for Watches and Jewelry.
LVMH can certainly display a very powerful army of designers and managers, all deeply focused in growing the brands and the group in the most incisive way, creating at every step brand value and strong equity, not just short term profit.
The group has also to deal with very aggressive competition. So, is the quest for supremacy just a matter of strengthening own brands or also fighting the competitors in different ways?
Has LVMH planned to implement such a strategy? And, in case, how?
In 2016 Dior announced the appointment of Valentino's Maria Grazia Chiuri as Women's Creative Director. The creative duo was divided and Pier Paolo Piccioli was confirmed as the sole designer at Valentino. Dior experienced since the first Chiuri collection a strategic booming of the accessories.
Is that an example on how to "keep your friends close and your enemies closer" strategy put in place?
And, what about Hedi Slimane? Having joined YSL in 2012, Slimane developed the style (that made him successful at Dior Homme) for the Kering brand's Men's and Women's collections over the course of four years, creating unbelievable excitement around the brand and a relevant turnover growth.
When Slimane split with Saint Laurent, Anthony Vaccarello replaced him but the look and feel of the brand didn't change very much from the mark left by the LA based designer. The Vaccarello era was just an adjustment and a tiny step forward from the Slimane aesthethic.
LVMH then tapped on Hedi Slimane for creative direction at Celine. And he started doing the Slimane again. The similarities between the aesthetic of both brands now is uncanny. A comparison between the two brands' black and white advertising campaigns and Instagram accounts reveal further similarities as well.
And, are we sure that Saint Laurent's customers will continue to purchase from Saint Laurent if they are such passionate fans about its re-founder Slimane? Will they move from Saint Laurent to Celine?
And, last but not least. Phoebe Philo. She would have been perfect at Burberry.
A Brit luxury creative director for the Brit brand on the brink of a huge relaunch managed by a former LVMH Céline CEO, Marco Gobetti. Some rumours hinted at the appointment of Philo at Burberry. Then they waned. Apparently she decided not to join any luxury brand. For the time being.
Has something happened that prevented Philo to sign the deal? Was the couple-to-be reunited an unacceptable idea for the French conglomerate? Is this just luxury science-fiction?
As Sun Tzu said “If his forces are united, separate them.”
At the end the luxury goods market is a blistering, harsh, ruthless battlefield whereas per Sun Tzu “Deep knowledge is to be aware of disturbance before disturbance, to be aware of danger before danger, to be aware of destruction before destruction, to be aware of calamity before calamity. Strong action is training the body without being burdened by the body, exercising the mind without being used by the mind, working in the world without being affected by the world, carrying out tasks without being obstructed by tasks.”
That's what Strategy is for.
Luxury is not about the next season trendy colour.
It's all about the behind the scenes Cabinet War Rooms.
Cover image: Studio Hillier