LVMH considers slimming down
Arnault reportedly exploring selling Fenty Beauty stake, vineyards and other brands, Ferrari deliveries drop, and the roaring trade in fraudulent luxury returns
In this week’s Dark Luxury news round-up
The Arnault empire starts selling. What goes first?
Former cop’s Dior return fraud is just the tip of the iceberg
Kentucky distillers and King Charles III tackle Trump tariffs
Jeff Bezos sneaks into his own fashion party
The hottest new art exhibition features stolen art
LVMH plans to sell brands to raise cash
LVMH is reportedly considering selling fashion, beauty and alcohol brands including Rihanna joint venture Fenty Beauty, Belmond, which operates hotels and the super-luxe $7,000-a-ticket Venice Simplon-Orient-Express and Napa Valley vineyard Joseph Phelps, which sells Bordeaux-style red for hundreds of dollars a bottle. The sales could amount to what the FT’s Adrienne Klasa reports to be “one of the most significant retrenchments of its near 40-year history”, as the group refocuses on key assets Dior and Louis Vuitton.
LVMH now has over 70 “maisons”, and it has acquired more than 200 brands in the last 25 years according to DealLogic data. The potential sales should be seen in the context of the recent slump in the share price (down 26 per cent year-to-date, even after today’s Iran War related bounceback), as well as Bernard Arnault’s desire to buy back shares to increase his family’s stake. One of the biggest potential cash raisers would be offloading Fenty Beauty, estimated to be worth as much as €2.5 billion.
Arnault could reportedly sell lossmaking newspaper Le Parisien to rightwing billionaire Vincent Bolloré, “a vocal supporter of Ms Le Pen’s hard-Right party”, according to the Telegraph. The Arnault kids reportedly don’t want that, but we’re reminded of two things: the deal Rupert Murdoch did with his kids, and that Arnault Sr met Le Pen along with other CEOs in a secret dinner last month. Money’s money, n’est-ce pas? (Financial Times)
Talking of money, Bernard Arnault received $3.8 billion in compensation last year while LVMH workers got an average pay increase of about 0.5 per cent, according to the International Trade Union Confederation’s calculations. (ITUC)
Puck’s Lauren Sherman writes that there’s “lingering skepticism about whether Bernard Arnault’s eldest daughter was suited to lead a turnaround at [Dior], the world’s second-biggest soft luxury brand”. She has staked Dior’s revival on creative director Jonathan Anderson, who will debut his first Cruise collection next week, and there are early signs of growing appetite in China and the US, she says. However, the intense buzz around Matthieu Blazy’s new Chanel means Anderson’s work will face even sharper scrutiny. (Puck)
Retiring LVMH watch boss says an Arnault should replace him
Jean-Christophe Babin, head of LVMH’s watch division, says he will retire and said Jean Arnault, 27-year-old son of LVMH boss Bernard Arnault, would be his preferred successor, in the world’s least surprising news. We were tickled by some of the quotes, which we’ve included here:
Arnault would be “the perfect person to take over that division”, because;
Arnault is “very clever”, and he “loves” and “understands watches”, and;
“I no longer necessarily dream of flying 150 days a year”. (Business of Fashion)
Ferrari beats estimates but deliveries drop sharply
Ferrari’s deliveries fell sharply by four per cent in the last quarter compared with the previous year, which the supercar maker attributed in part to Iran War-related disruptions. The company still managed to beat analyst expectations for revenue and earnings per share. The FT reported in March that Ferrari was flying cars out to the Middle East as cargo shipping costs skyrocketed, so the drop in shipments was perhaps somewhat predictable. A lot is riding on the company’s next product, its first all-electric car, the Ferrari Luce, with an interior designed by Apple alumni Jonathan Ive. The industry’s track record on high-end electric cars has not been great, so everyone from Jaguar to Rolls-Royce will be watching this launch closely. But at least it has physical buttons! Really really nice buttons. (Bloomberg / CNBC)
The Hormuz standoff is creating a chokepoint in base oil supply used in high-performance engines, with Ferrari, Lamborghini, McLaren and Pagani all exposed to potential production limits and cost rises. (CNBC)
Jeff Bezos reportedly had to ‘sneak into’ his $10 million fashion party
“Jeff Bezos snuck into the Met Gala”, reports The Cut, which is a bit sad because he basically paid for the shindig, sponsoring the red-carpet-peacock-walk-with-a-charity attached for a reported $10 million. Amy Odell of Back Row interviewed one of the protesters from the UK-based group who no doubt contributed to that decision. “Emma felt angry when she learned of Bezos funding the gala because ‘he’s literally partying while he’s burning the world around us’”, Odell reports. Activists reportedly placed small bottles of urine with his face on them around the venue. (Back Row)
EU removes leather from anti-deforestation law
Last week we reported on allegations that the head of LVMH-controlled tannery group Nuti Ivo was leading an industry campaign to weaken the EU Deforestation Regulation, claims that LVMH “categorically denied”. Now we learn the campaign-that-was-not-a-campaign appears to have succeeded. The European Commission has decided to exempt leather, hides, and skins from the landmark law entirely, accepting the industry argument that leather production doesn’t incentivise the cattle farming driving deforestation. (Reuters)
The dark world of return fraud
We are slightly obsessed with “return fraud” here at Dark Luxury, where people make money by manipulating retailers’ shoddy returns policies, often by claiming cash refunds on luxury goods bought legitimately, but then never returning the products. Three stories about the phenomenon passed our feeds this week…