Luxury’s laundry problem
Arnault deflects succession talk again, not one but two fascinating money laundering stories linked to the luxury industry, and Dior tries to sell half a sandal
In this week’s Dark Luxury news round-up
Arnault’s children take the stage as he bats away succession, again
Galeries Lafayette’s third-best Chinese guide ran a money-laundering ring
The fugitive who allegedly bought his way into ultra-luxe Aman deals
LVMH lobbies Brussels on leather while cutting its last French tannery
Prada’s €750 apology sandal
Arnault warns of ‘catastrophe’
Bernard Arnault used LVMH’s 2026 annual meeting last week to deliver a stark warning, telling shareholders that the Middle East war could spiral into a “global catastrophe” and that the group’s recovery (shares are down 30 per cent year-to-date) depends on a swift resolution. It reflects how seriously the conflict has and likely will continue to hit tourist spending and demand for luxury goods. Executives at Hermès, Kering, Richemont and, frankly, any business with exposure to wealthy customers in the Middle East, Asia and Europe should probably share this concern as oil hits $115 a barrel today. Puck’s Lauren Sherman writes that “Arnault’s relationship with Donald Trump is more important than ever now”, but it’s hard to see what influence he, or anyone else, has over the US President until after the midterms in November. Meanwhile, the FT’s Edward Luce writes, “Get used to the long Iran War”. If that’s true, get used to depressed luxury sales and share prices then, too.
The Arnault siblings take the mic
Arnault chose to put all five of his children on stage this year in a fascinating test of the nerves of these scions of industry. Delphine seemed the most confident, despite being forced to hold a microphone in the front of the stage, evoking Kendall “L to the OG” Roy. She did not break into song, instead boasting about the LVMH prize and boosting “genius” Jonathan Anderson at Christian Dior. She was third to take the stage after her younger brothers Frederic and Jean, who seemed very comfortable, perhaps because they have less at stake in the succession story. Alexandre seemed the most nervous, and Antoine, the next eldest after Delphine, seemed to hide a bit behind the lecturn by contrast.
In response to questions of succession at the meeting, the 77-year-old billionaire and CEO was characteristically dismissive. He pointed to his renewed contract and the active roles of his five children across the group, declining to be drawn further. “We’ll talk about all this again in seven or eight years”, he bluntly told investors. And since he now symbolically owns more than half of the group’s shares by capital and nearly two thirds of the controlling vote, he can afford to. LVMH short-seller Intern Pierre found it interesting that his son Alexandre Arnault used the meeting to pitch the group’s alcohol expansion plans in Africa, framing the continent as a long-term growth opportunity. Yes, Africa and Nigeria in particular are a growth story for the future, but that pitch will strike some investors rather irrelevant to their concerns about the languishing share price right now.
(Financial Times on AGM / Financial Times on LVMH sales / Intern Pierre / Lauren Sherman in Puck)
A smaller luxury bellwether: Beiersdorf, owner of luxury skincare brand La Prairie, reports a Q1 sales decline and considers price hikes as the Middle East crisis hits Chinese travel retail and regional markets (Business of Fashion)
Knight Frank says the global UHNWI population, aka people with more than $30 million of assets, rose to 713,626 in 2026 from 551,435 in 2021. Although now we think about it, considering how high inflation has been for the last few years, is that number particularly surprising? (Knight Frank)
Galeries Lafayette’s third-best Chinese guide was a money-laundering boss
French investigative weekly Le Canard Enchaîné has perhaps the juiciest dark luxury story of the week. Paris judicial police investigating money laundering raided a textile wholesale business in Aubervilliers in September, and found €150,000 in cash hidden in a false ceiling. They believe the cash was the proceeds of prostitution and trafficking rings, and that it was destined for the aisles of Galeries Lafayette, one of Paris’s most prestigious department stores.
The scheme works like this, according to L’CE. Criminal networks generate cash around Paris, with couriers collecting it on scooters from brothels and massage parlours. That cash is then handed to professional Chinese shoppers, known as daigou, which we have reported on previously, in envelopes and plastic bags, in €10,000 batches, on the shop floor of Lafayette itself. The daigou spend it on luxury goods to take back to China, where the same items cost 30 to 40 per cent more. They also pocket the VAT refund, again as previously reported. On top of making a profit, the money enters the store dirty and leaves clean.
Lafayette is the venue of choice because the store actively recruits these shoppers through Chinese travel agencies, paying generous kickbacks to the tour guides who deliver high-spending tourists. In 2025, according to an internal Lafayette document, the store’s ten best-performing Chinese guides earned €4.3 million in commission, on purchases of more than €50 million, largely in cash. Chinese customers account for 22 per cent of sales at the Haussmann flagship, which turned over €2 billion last year. The guide arrested in September as “the boss of the Chinese launderers” had, at the time, just finished the year ranked third on Lafayette’s own internal leaderboard of top Chinese guides. (Le Canard Enchaine)
Armani posts first results after Giorgio’s death
Armani Group is looking for an investor to take a stake in the company after the death of its founder Giorgio in September, and the latest set of results may not help that mission. Revenue fell 2.8 per cent last year, and CEO Giuseppe Marsocci warned of a “possible structural change in the approach to luxury and fashion”, adding “We cannot fail to recognize the need to adapt to a changing context”. Luxury rebound? What luxury rebound? (Business of Fashion)
Ultra-luxe Aman’s alleged links to ‘money laundering kingpin’
Ultra-luxury hotel brand Aman, where prices for a single night stay can exceed $5,000 a night, operates some of the world’s most exclusive properties and has cultivated a client base of heads of state, billionaires and ultra-high-net-worth individuals who prize discretion above all else. That discretion is very much at risk, as the company’s board is reportedly in turmoil after links to South African fixer Benjamin Mauerberger were exposed, according to Whale Hunting’s detailed account. Mauerberger, who is wanted on fraud and money laundering charges in Thailand, allegedly managed to put money into several Aman projects including a Janu-branded hotel in Dubai, and others in Japan and the Maldives. Aman investors including Saudi Arabia’s Public Investment Fund and Cain International understandably want to know how this happened. (Whale Hunting)
Brunello Cucinelli quietly tightens sanctions compliance
Italian luxury group Brunello Cucinelli, run and owned by the self-described eponymous “philosopher”, said it strengthened its controls to monitor compliance with EU sanctions on Russia in its 2025 annual report, reports Reuters. The firm commissioned an external law firm and its board adopted an “enhanced trade compliance procedure” in December, a few months after short-selling group Morpheus alleged in September that the firm continued selling goods in Russia in violation of those sanctions. You can find the disclosure on page 37 of its 86 page report, published last week. (Reuters)
Former Stella McCartney exec alleges price fixing
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