CONSUMERS

LVMH, Sun Tzu and the Quest for Supremacy

by

Susanna Nicoletti

|

This is the featured image caption
Credit: This is the featured image credit
LVMH has been the very first luxury conglomerate to set up a proper group strategy, beyond the single Brands development. However, the group has to deal now with very aggressive…

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

LVMH has been the very first luxury conglomerate to set up a proper group strategy, beyond the single Brands development. However, the group has to deal now with very aggressive competition.

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.

The greatest competitor of LVMH is Kering. The feud between the Arnaults and the Pinaults started with the fight to conquer some of the most prestigious Italian brands: Gucci and Fendi.

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.

Image:WWD

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?

As per Sun Tzu The Art of War “The supreme art of war is to subdue the enemy without fighting.”

Has LVMH planned to implement such a strategy? And, in case, how?

Image: Valentino

Valentino, thanks to the creative duo Chiuri and Piccioli, became one of the most sought after luxury brands. A serious and prestigious competitor of some luxury brands of LVMH.

Strong both in accessories and apparel, the Roman brand grew its revenues thanks to the trust and support of Mayhoola, the Qatari owner, and Valentino and Giammetti themselves.

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

Susanna Nicoletti
Susanna Nicoletti

Brand Catalyst and Founder of LuxFashion

Susanna Nicoletti is a Marketing, Digital and Communication Senior Executive in the fashion and luxury industry with a track record in top global groups and brands. A Brand Catalyst helping fashion and luxury brands building authentic leadership thanks to long lasting, strong Brand Equity and successful Business Growth Management. A Business and Strategy Writer. Explorer of new luxury and fashion marketing frontiers.

CONSUMERS

LVMH, Sun Tzu and the Quest for Supremacy

by

Susanna Nicoletti

|

This is the featured image caption
Credit : This is the featured image credit
LVMH has been the very first luxury conglomerate to set up a proper group strategy, beyond the single Brands development. However, the group has to deal now with very aggressive…

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

LVMH has been the very first luxury conglomerate to set up a proper group strategy, beyond the single Brands development. However, the group has to deal now with very aggressive competition.

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.

The greatest competitor of LVMH is Kering. The feud between the Arnaults and the Pinaults started with the fight to conquer some of the most prestigious Italian brands: Gucci and Fendi.

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.

Image:WWD

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?

As per Sun Tzu The Art of War “The supreme art of war is to subdue the enemy without fighting.”

Has LVMH planned to implement such a strategy? And, in case, how?

Image: Valentino

Valentino, thanks to the creative duo Chiuri and Piccioli, became one of the most sought after luxury brands. A serious and prestigious competitor of some luxury brands of LVMH.

Strong both in accessories and apparel, the Roman brand grew its revenues thanks to the trust and support of Mayhoola, the Qatari owner, and Valentino and Giammetti themselves.

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

Susanna Nicoletti
Susanna Nicoletti

Brand Catalyst and Founder of LuxFashion

Susanna Nicoletti is a Marketing, Digital and Communication Senior Executive in the fashion and luxury industry with a track record in top global groups and brands. A Brand Catalyst helping fashion and luxury brands building authentic leadership thanks to long lasting, strong Brand Equity and successful Business Growth Management. A Business and Strategy Writer. Explorer of new luxury and fashion marketing frontiers.

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