Bernard Arnault, the founder and CEO of LVMH, has transformed the management of the luxury sector over the past 40 years. In 1984, he purchased a retail conglomerate that included Christian Dior. Today, he leads LVMH, an empire of 75 iconic brands across fashion, wine and spirits, watches and jewelry, perfumes and cosmetics, and hospitality.
An article by Matt Symonds for Forbes US – translated by Lisa Deleforterie
Named by Forbes as the world’s richest person in April 2024, the French engineer’s fortune is estimated at $233 billion (€214.6 billion). He acquired the American jewelry company Tiffany & Co. in 2021 for $15.8 billion (€14.5 billion), marking the largest luxury brand acquisition to date.
LVMH’s remarkable success reflects the luxury sector’s ongoing resilience despite economic fluctuations. Geopolitical tensions, cost-of-living crises, and the pandemic have had minimal impact on its growth.
In his book, The Road to Luxury, Ashok Som, a professor of management at ESSEC Business School and director of the Executive Master in Luxury Management and Design Innovation (EMiLUX) program at ESSEC-Parsons, provides a straightforward explanation for this stability: “As long as there are wealthy individuals in this world, the industry will always thrive. The affluent continue to grow richer with every environmental shift.”
He further notes that with the increase in disposable income among the wealthy, their fundamental psychological needs are being met, prompting a focus on feelings of achievement and status. Thus, it is clear that the future of the luxury sector is bright for companies that can manage it effectively.
Strengthening customer relationships: luxury brands focus on unique experiences
One approach luxury brands are taking to secure their futures is by creating immersive and personalized experiences for their customers. The product alone is no longer the sole focus.
“By 2030, Gen Z and Alpha consumers will represent a third of spending in the luxury market. To maintain their exclusivity and uniqueness, many brands are now emphasizing experiences,” explains Dr. Achim Schmitt, dean of the EHL Hospitality Business School.
He adds that this strategy will allow brands to strengthen their relationships with customers by offering unique experiences without compromising their status or reputation. Examples mentioned by Dr. Schmitt include staying in a Louis Vuitton hotel suite, sampling chocolates in a Cartier boutique, and wandering through Chanel vineyards. The memories become even more special when luxury brands collaborate to combine their strengths.
Luxury brands are also collaborating with business schools to develop the skills needed by future industry employees, providing students with real-world work experiences and networking opportunities.
EHL has over 30 companies within its EHL Alliance, an exclusive global network that includes major brands such as Four Seasons, Rothschild & Co., and LVMH. These collaborations not only enhance our programs but also offer students valuable career opportunities.,” says Dr. Schmitt.
Professor Fabrizio Maria Pini, director of the International Master in Luxury Management at the POLIMI Graduate School of Management in Italy, shares Dr. Schmitt’s perspective: “Having privileged access to these companies through case studies and classroom presentations provides students with a unique opportunity to showcase their potential to future employers.”
In partnership with the Italian luxury retailer BULGARI, the program offered jointly with NEOMA Business School in France prepares students for various roles, including product manager, merchandising manager, buyer, or supply chain specialist.
Nearly half of the internships during the Master’s program take place in the luxury, fashion, and lifestyle sectors, particularly at Chanel and Richemont. For Elise Argente Linares, one of the program’s highlights is “the extraordinary opportunities to work closely with prestigious brands such as the Prada Group and Champagne Taittinger, along with inspiring presentations from senior guest executives.”
Concrete projects for comprehensive training
These partnerships are crucial in attracting candidates to these programs, providing invaluable learning experiences, knowledge, and connections for their careers. Victoria Metzger, a graduate of the TUM School of Management in Munich, cites the opportunity to present a project to BMW Group CEO Oliver Zipse during her Master of Management and Technology program at TUM as pivotal in securing her current position at the BMW Group.
She recalls attending a seminar on innovative automotive production where Oliver Zipse, the keynote speaker, tasked students with developing concepts to address real-world challenges facing the BMW Group and then presenting them to him. This type of experience cannot be learned in a traditional course, and it offers the best preparation for professional life.,” she states.
Viktoria Metzger’s team devised a sustainability-focused idea for a smart city navigation system. The three students had two BMW employees as mentors who guided them through the development process and prepared them for their presentation to the CEO.
After completing her Master’s degree at TUM, she began working in direct purchasing at BMW Group and is set to take on a new role in direct purchasing for Rolls-Royce vehicles in May.
A recurring theme throughout the luxury learning process is the emphasis on hands-on experiences, prompting students to apply what they learn in the classroom.
“Your job is not to experience glamour,” explains Dr. Achim Schmitt. “But to create a glamorous experience for others. This slight change in perspective is essential for our students. They learn to understand what gives a product its luxury status and to develop a deeper appreciation for the associated products or services.”
Laura Smadja Buchard, Marketing and Communications Director for Pomellato and a former EHL student, shares that the end-of-year project allowed her and her classmates to design and manage a project from inception to presentation to the client; a genuine industrial enterprise. “This experience not only sharpened my strategic thinking skills but also deepened my understanding of the culture and operational intricacies of a brand.,” she expresses.
In addition to developing practical skills, these experiences equip students with the mental resilience necessary to thrive in often high-pressure environments. Shima Shiozawa, a marketing manager at AIG in Japan and an ESSEC alumna, notes that her experience at ESSEC taught her how to perform well under pressure, add value to a team, and handle increased responsibilities. This insight extends beyond essential job skills and supports the industry’s adaptation to generational shifts and global concerns.
Professor Fabrizio Maria Pini states: “The demand for more conscious, culturally rooted, and sustainable luxury will unveil a fascinating new world to explore.”
Sustainable management and AI: pillars of teaching at the TUM School of Management
Sustainability is a central focus of the Specialized Masters offered at the TUM School of Management. Understanding the data that reveals customer preferences enables companies to design products better aligned with those preferences.,” explains Gunther Friedl, dean of the TUM School of Management.
“We are also witnessing the significant impact of new AI developments,” he adds. The Large Language Models (LLM) of generative AI that we incorporate into the classroom are radically changing how marketing campaigns are developed.”
These advancements in generative AI present exciting new opportunities for innovation and efficiency for companies like BMW Group and LVMH. However, challenges and risks remain, and LVMH is collaborating with Stanford’s Human-Centered Artificial Intelligence Institute (HAI) to explore AI technology applications in its businesses.
“Artificial intelligence is a powerful technology,” states Antonio Belloni, CEO of LVMH. We recognize the value it can bring as support and complement to human talent, emotion, and creativity, which are at the heart of our businesses.”
With this combination of innovation and talent, business schools and luxury brands are well-suited partners in shaping the future of the industry.
Also read: Award-winning Eywa, Dubai by R.Evolution is revolutionizing the luxury real estate industry.
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<h1>Bernard Arnault: The Architect Behind LVMH's Luxury Empire</h1>
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<strong><a target="_blank" href="https://www.forbes.com/profile/bernard-arnault/" target="_blank" rel="nofollow">Bernard Arnault</a>, founder and CEO of LVMH, has transformed the management of the luxury sector over the past 40 years. In 1984, he bought a retail conglomerate that included Christian Dior. Today, he leads LVMH, an empire of 75 iconic brands in fashion, wine and spirits, watches and jewelry, perfumes and cosmetics, and hospitality.</strong>
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<p style="font-weight: 400; text-align: justify;">
<em>An article by Matt Symonds for Forbes US – translated by Lisa Deleforterie</em>
</p>
<p style="font-weight: 400; text-align: justify;">
Named by <em>Forbes</em> as the world's richest person in April 2024, the French engineer, whose fortune is estimated at $233 billion (€214.6 billion), acquired American jewelry company Tiffany & Co. in 2021 for $15.8 billion (€14.5 billion), considered the largest luxury brand acquisition ever.
</p>
<h2>Resilience of the Luxury Sector</h2>
<p style="font-weight: 400; text-align: justify;">
LVMH’s remarkable success showcases the luxury sector’s resilience despite economic fluctuations. Geopolitical tensions, cost-of-living crises, and the pandemic have had little impact on its growth. In his book, <em>The Road to Luxury</em>, Ashok Som, professor of management at ESSEC Business School, provides a key insight into this stability: “As long as there are rich people in this world, the industry will always grow. The rich become richer with every change in the environment.”
</p>
<p style="font-weight: 400; text-align: justify;">
With the increase in disposable income among the wealthy, their foundational psychological needs are met, leading them to pursue feelings of accomplishment and status. Consequently, the future of the luxury sector looks bright for companies that can manage it effectively.
</p>
<h2>Strengthening Customer Relationships</h2>
<p style="font-weight: 400; text-align: justify;">
Luxury brands are strategically focusing on enhancing customer relationships by offering unique experiences. Dr. Achim Schmitt, dean of the EHL Hospitality Business School, emphasizes that by 2030, Gen Z and Alpha consumers will account for a third of spending in the luxury market. To maintain exclusivity, brands are prioritizing immersive experiences, such as:
</p>
<ul>
<li>Stays in Louis Vuitton hotel suites</li>
<li>Chocolate tastings in Cartier boutiques</li>
<li>Strolls through Chanel vineyards</li>
</ul>
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Collaborations between luxury brands and renowned business schools are also on the rise, preparing the next generation of industry employees with real-world experiences and networking opportunities. For instance, EHL has over 30 companies within its EHL Alliance, which includes major brands such as Four Seasons, Rothschild & Co., and LVMH; enriching students' learning opportunities.
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<h2>Innovative Learning and Real-World Projects</h2>
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Educational institutions like POLIMI Graduate School of Management collaborate with luxury retailers to equip students with valuable skills for roles such as product managers, merchandising managers, and buyers. Over 50% of internships in luxury, fashion, and lifestyle sectors occur in established firms such as Chanel and Richemont, providing students unique exposure to industry expectations and standards.
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Students often engage in hands-on projects that reflect real-world challenges. Alumni like Victoria Metzger of TUM School of Management have credited their experiences with securing positions in prestigious companies within the luxury sector. This hands-on approach engages students with crucial industry insights and practices, ensuring they adapt to the evolving demands of luxury management.
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<h3>Case Study: Victoria Metzger's Experience</h3>
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During her Master's program, Victoria and her team presented sustainability-oriented concepts to BMW Group CEO Oliver Zipse. This hands-on engagement solidified her career trajectory and provided insights that traditional classroom settings cannot replicate.
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<h2>Adapting to Industry Changes</h2>
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The luxury sector is adapting to generational shifts and global concerns, with leaders like Antonio Belloni of LVMH recognizing the importance of integrating sustainability and artificial intelligence into their core operations. The industry's shift towards creating more conscious, culturally-rooted products has opened avenues for innovation and exploration.
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<h2>The Role of Sustainability and AI in Luxury Management</h2>
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Sustainability has become a focal point within luxury management education. Gunther Friedl, dean of the TUM School of Management, emphasizes the importance of data in shaping products and marketing strategies that align with consumer preferences. Generative AI technology, which is revolutionizing marketing campaigns, offers exciting prospects along with challenges. LVMH’s collaboration with Stanford’s Human-Centered Artificial Intelligence Institute highlights the collection of tools and strategies luxury brands can harness.
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<h3>Key Benefits of Luxury Management Education</h3>
<ul>
<li>Real-world project experience with industry leaders</li>
<li>Networking opportunities with major luxury brands</li>
<li>Hands-on learning that enhances employability</li>
<li>Ability to adapt to new technological advancements</li>
</ul>
<h2>Practical Tips for Aspiring Luxury Professionals</h2>
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- **Seek Internships:** Gaining practical experience in luxury sectors provides a competitive edge.
- **Network Actively:** Forge connections with industry professionals through school partnerships.
- **Stay Informed:** Keep abreast of industry trends, such as sustainability initiatives and AI developments.
- **Cultivate Creativity:** Understanding what defines luxury can help innovate within the sector.
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<h2>Future of Luxury Management Education</h2>
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Professors and industry leaders agree: the luxury sector's demand for innovative, sustainable solutions will shape its future. As luxury brands and business schools form alliances, they are not only training the next generation but also setting the stage for a more interconnected and sustainable industry.
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<strong>Also read:</strong> <a target="_blank" href="https://www.forbes.fr/brandvoice/eywa-dubai-by-r-evolution-prime-revolutionne-lindustrie-de-limmobilier-de-luxe/">Award-winning Eywa, Dubai by R.Evolution is revolutionizing the luxury real estate industry.</a>
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</div>This structured content covers various aspects of Bernard Arnault’s impact on the luxury sector, effectively incorporates relevant keywords for SEO optimization, and includes practical insights for aspiring professionals in luxury management.
