- LVMH CEO Bernard Arnault describes the global market as "difficult and disturbed," with the luxury giant reporting revenue declines amid economic slowdowns.
- The company announces leadership promotions, including Pietro Beccari as executive chairman of LVMH Fashion Group, to bolster resilience into 2026.
- Shareholders press for clearer succession plans for 77-year-old Arnault, whose mandate was extended to age 85, amid governance concerns.
LVMH, the world's largest luxury goods conglomerate, is navigating a turbulent market as CEO Bernard Arnault recently characterized the global environment as "difficult and disturbed." This aligns with the company's financial reports showing sales declines, though there are signs of stabilization in the latest quarter. According to people familiar with the matter, the luxury sector is experiencing a broader contraction, with global personal luxury goods sales falling approximately 2% to €358 billion in 2025 from €364 billion in 2024, following post-pandemic highs.
In 2024, LVMH's revenue dropped 2% to €84.68 billion from €86.15 billion in 2023, with operating income down 14% to €19.571 billion and net profit declining 17% to €12.55 billion. However, cash flow rose 29% to €10.47 billion, indicating some financial resilience. Through September 2025, revenue was €58.09 billion, down 4% on a reported basis but only 2% organically, with the third quarter showing 1% growth to €18.28 billion, driven by Asia's recovery and stable demand in Europe and the U.S. The company has proposed a €13 per share dividend for the April 23, 2026, shareholders' meeting.
Amid these challenges, LVMH is restructuring its leadership to enhance agility. Effective January 1, 2026, Pietro Beccari, CEO of Louis Vuitton and former head of Dior, was promoted to executive chairman of LVMH Fashion Group, which includes brands like Celine, Loewe, and Givenchy. He replaces Sidney Toledano, who shifted to an advisory role after over 30 years with the company. This move strengthens Italian leadership within the group, according to sources close to the matter. In a brief statement, Arnault emphasized that these changes are aimed at "fostering creativity and operational efficiency" as the company adapts to market pressures.
Shareholders are increasingly vocal about succession planning, with Arnault turning 77 in March 2026 and his mandate extended to age 85. His five children hold key roles in the company, but the opacity surrounding long-term leadership is seen as a governance risk, sparking calls for greater transparency. One institutional investor, who requested anonymity due to ongoing discussions, noted that "without a clear roadmap, the company could face valuation discounts in the future." Efforts to reach LVMH for additional comment on succession were unsuccessful.
Looking ahead, the short-term outlook hinges on Asia's rebound and expansion in selective retail segments like Sephora, which grew 3-7% organically through September 2025. Fashion and leather goods, however, dropped 6-8% organically during that period, while perfumes and cosmetics held firm, buoyed by launches such as Louis Vuitton's new makeup line. Analysts from Bain and Altagamma forecast 3-5% growth for the luxury sector in 2026, driven by pricing adjustments and margin improvements. Arnault has expressed confidence in LVMH's ability to lead through creativity, though he remains vigilant on costs and brand desirability. As the market evolves, clarity on succession could mitigate risks and align with broader industry trends toward governance scrutiny in family-led firms.