2024-11-17 11:04:00
Update
November 17, 2024
12:04
Bernard Arnault, CEO of LVMH, continues the reshuffle of his entities. He propelled his son Alexandre, current vice-president of the Tiffany jewelry store, to the head of Moët Hennessy; an entity that should be affected in the event of customs duties on European products.
The news broke this week. Alexandre Arnaultthird of five children of Bernard Arnault, boss of LVMH
abandons the management of the American luxury jewelry store Tiffany in favor of the management of Moët Hennessy. A transfer which raises certain questions.
On February 1, Cécile Cabanis will become financial director. She will succeed Jean-Jacques Guiony, who takes over as head of LVMH’s important “Wines and Spirits” division. Alexandre Arnault (32 years old) is promoted deputy general director.
In 2021, at age 28, he was placed in the vice-president, product management and communications at Tiffany, acquired some $16 billion.
Should we do today the link between the arrival of Alexandre Arnault at Moët Hennessy and the threats of President Trump to introduce customs duties on European products?
The Arnault lobbyists
The wine and spirits sector is currently penalized by effects of destocking in the United States and sluggish Chinese demandwith the icing on the cake being the customs fees introduced by China on European spirits in response to taxes on electric vehicles and Trump’s threats.
Let us remember that Moët Hennessy brings together 27 brands champagne (Moët & Chandon, Dom Pérignon, Veuve Clicquot, Ruinart, Krug, Mercier and Armand de Brignac at 50/50 with singer Jay-Z), cognac (Hennessy), spirits (Belvedere Polish vodka, Ardbeg Scottish whiskey and Glenmorangie, Woodinville Whiskey Company bourbon, Mexican tequila Volcan De Mi Tierra, Cuban rum Eminente) and wine properties in France and abroad.
For the first nine months of the year, this activity showed an 8% drop in sales at 4.2 billion euros.
In addition to the market downturn, this entity also experienced internal quarrels between leaders. Hence the renewal of governance which is also part of the broader reorganization of the LVMH management team.
Alexandre et Donald
Le Figaro noted the strengths of Alexandre Arnault faced with such challenges. First, his knowledge of American market. Since its acquisition, Tiffany has seen its results triple.
Its emblematic store, located between 5th Avenue and East 57th Street, reopened last year after three years of work, is also available as an exhibition gallery.
Second, il ya les personal ties between the Arnault family and Donald Trump.
“The other players in champagne and cognac are banking on Bernard Arnault to be their best lobbyist, capable of convincing the elected president to observe customs moderation.”
Alexandre Arnault was seen in October at candidate Trump’s meeting at Madison Square Garden. The American Puck site specifies that he was near the donor booths and would have disappeared discreetly shortly before the start of the Republican’s speech.
Certainly, Trump has known Bernard Arnault for 40 years and describes him as “one of the greatest businessmen in the world”. When the patriarch of the Arnault family met President Trump in 2017 at Trump Tower to inform him of his desire to invest in the United Stateshis son Alexandre is at his side.
He will also be there during the inauguration – in the presence of President Trump – of the Texas leather goods workshop of LVMH, which, with the two Californian units, locally produced Louis Vuitton.
So what remains for the luxury group is problem of possible customs duties on spirits. “The other players in champagne and cognac are banking on Bernard Arnault to be their best lobbyist, capable of convincing the president to observe customs moderation,” we read in Le Figaro. Is his son Alexandre therefore destined to take on this costume?
The summary
- Change in governance at Moët Hennessyentity dedicated to LVMH spirits and wines: Jean-Jacques Guiony becomes CEO, Cécile Cabanis, CFO, and Alexandre Arnaultson of the group’s CEO, leaves Tiffany to become deputy general manager.
- Qualified as a connoisseur of the American market, Alexandre Arnault also knows Donald Trump well.
- French players in champagne and cognac are counting on Bernard Arnault to reduce the Trump’s customs threats on European products. Is the arrival of Alexandre at the head of Moët Hennessy therefore a coincidence?
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How could the potential customs duties from the U.S. administration affect the future operations and sales strategies of Moët Hennessy?
**Interviewer:** Thank you for joining us today. We’re here to discuss the recent developments at LVMH, particularly the promotion of Alexandre Arnault to the head of Moët Hennessy. What do you think motivated Bernard Arnault to make this significant move?
**Guest:** Thank you for having me. This reshuffle seems to reflect Bernard Arnault’s focus on strengthening leadership in pivotal areas of the business. By promoting Alexandre, who has proven successful at Tiffany & Co., it seems Bernard is positioning his son to tackle the challenges Moët Hennessy is currently facing, including declining sales and potential tariffs on European products.
**Interviewer:** You mentioned the challenges. Can you elaborate on how external pressures, especially the potential customs duties from the U.S. administration, could influence Moët Hennessy’s strategies moving forward?
**Guest:** Absolutely. Moët Hennessy has been seeing an 8% drop in sales this year, with the market affected by sluggish demand in China and ongoing destocking in the U.S. The looming threat of customs duties under the Trump administration could exacerbate these issues. Alexandre’s connections and understanding of the American market could provide LVMH with a strategic advantage in navigating these complexities.
**Interviewer:** Speaking of connections, how important is Alexandre’s relationship with Donald Trump, and what could it mean for Moët Hennessy in dealing with U.S. market issues?
**Guest:** That relationship could play a crucial role. Alexandre was seen at a recent Trump event, and historically, the Arnault family has had a good rapport with him. Given Trump’s familiarity with Bernard Arnault, there’s potential leverage in their personal ties. This could influence the conversations around customs policies in favor of the luxury goods sector, where Moët Hennessy holds significant stakes.
**Interviewer:** It’s interesting that you mention personal ties. In what ways do those connections manifest in business strategies for LVMH?
**Guest:** Personal relationships often pave the way for smoother communications and negotiations. In this case, having someone like Alexandre who can engage directly with influential political figures could help LVMH advocate for more favorable conditions for their brands in the U.S. market. It’s all about finding the right balance in leveraging those relationships while focusing on business performance.
**Interviewer:** With the management changes and Alexandre’s new role, do you think we can expect a shift in Moët Hennessy’s operational strategy?
**Guest:** Definitely. Alexandra’s ascent allows for a fresh perspective, particularly towards repositioning the brand amidst current market challenges. His experience from Tiffany, where he led a revival, could be instrumental in innovating Moët Hennessy’s approach to products and marketing strategies. It’s about not just maintaining but also expanding their footprint in a competitive landscape.
**Interviewer:** Thank you for sharing your insights. It seems like we should keep a close eye on these developments as they unfold in the luxury goods market.
**Guest:** My pleasure! The luxury market is always in flux, and LVMH’s strategic moves will certainly be significant to watch in the coming months.