“In a group like ours, you have to keep the entrepreneurial spirit. Even if it’s a group of a certain size, you have to feel as if you’re in a small family business. So when you join LVMH, you’re not joining a limited company, you’re joining a family. It’s the LVMH family, with all its advantages and disadvantages.”
On Thursday morning in Paris, Bernard Arnault once again emphasised the “family spirit” of LVMH to around a hundred executives and decision-makers and hundreds of shareholders in his luxury group, which owns 75 companies including Louis Vuitton, Dior, Moët & Chandon, Henessy, Sephora, Bulgari and Tag Heuer.
Admittedly, since April 18, the group, which achieved sales of 86.2 billion euros and net profit of 15.2 billion euros in 2023, has become much more of a family business: two of its CEO’s sons have been accepted onto the board of directors. When shareholders voted on the resolutions, 6.5% of votes were against Alexandre and Frédéric Arnault joining the board, while Henrie de Castries was almost unanimously in favour. Proof that, despite LVMH’s performance in recent years (the share price has risen by 223% in the last five years), not all shareholders are in favour of the family business concept. “The role of the family is to create that spirit in the company that enables us to have a long-term vision. Today everything is fine, the share price is fine. But our responsibility is to make sure that in ten years’ time our brands are as desirable, if not more so, than they are today,” the CEO explained to a group of journalists at the end of the AGM. We’re not looking for immediate profitability or tomorrow morning’s share price. It’s a vision that sets us apart from companies that work for the next ‘quarter'”.
In addition, while the controversy over the pay of the Stellantis CEO is raging in France, the resolutions on the pay policy of the LVMH CEO and his deputy CEO were approved… but with 18.9% of votes against. Shareholders, on the other hand, were unanimous in approving the Group’s share buyback programme.
Leverage, which would enable shareholders to see the unit value of their shares rise, appeals to many shareholders. However, while Jean-Jacquis Guiony, the group’s financial director, went into detail about the group’s performance and approved a dividend of 13 euros per share, and Bernard Arnault outlined the successes of 2023, such as Pharrell Williams‘ first show on the Pont Neuf in Paris, Loro Piana’s success with “extraordinary results” and the performance of Tiffany’s New York flagship as the group’s first shop, there was much talk of sharing value during the morning.
Bernard Arnault dwelt on the group’s social and environmental commitments. “We are going to launch a share purchase plan for employees at the end of the year”. A way of highlighting the benefits of the Group’s performance for its teams… And to promote itself. At a time when more and more young companies are defining themselves by their impact on society or the environment rather than by their growth performance, LVMH, which will be in the spotlight on the world stage in less than 100 days as a partner of the Paris Olympic and Paralympic Games, clearly emphasised this notion of impact during its AGM.
Chantal Gaemperle, Director of Human Resources, also gave a detailed presentation of the Group’s initiatives for employees, pointing out that the Group has recruited 60,000 people worldwide and that it is introducing promotions and mobility within the Group, benefiting 18,000 employees in 2023. The group has 118 workshops in France and 26 in Italy. The CEO highlighted the LVMH Heart Fund, which since 2021 has aimed to support employees facing difficult personal situations.
“Since the beginning, we have had this family spirit. We take care of our employees. We try to help them progress and develop their entrepreneurial spirit,” Bernard Arnault told the press. And when things aren’t going so well, we take care of them all the same”.
But the group also wants to convey the fact that its impact extends well beyond its own borders, particularly in France, where it employs more than 214,000 people. Involving essayist Nicolas Bouzou and his consultancy Asteres, the group claims that its business generates 8.1 billion euros in tax revenue for the state and local authorities, that it accounts for more than 4% of French exports of goods, and that “1 euro of group sales generates 1 euro of activity in the rest of the French economy”. With some sections of public opinion regularly showing a lack of confidence in the growth and profits of major groups, LVMH’s message is very clear: according to the data provided by this consultancy, LVMH’s good health is good for the French economy as a whole. Presenting the many initiatives to develop a more responsible luxury goods industry, around Life 360, Antoine Arnault highlighted the Group’s positive impact on the environment.
This highlighting of the Group’s socio-economic and environmental impact and its commitment to its teams comes at a time when, at the start of the week, a study by Leherpeur on the future of the fashion industry showed that professionals in the sector were distrustful of the business plans of fashion and luxury groups and their managerial practices. In the light of LVMH’s offensive communication, this observation has been well understood within the number 1 luxury group.
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