
This Week: What's Ailing Louis Vuitton?
Is Bigger Still Better? In previous slowdowns like the 2008 financial crisis or Covid-19 pandemic, LVMH's staggering scale and exposure across competing categories helped it hold up better and bounce back more quickly than rivals. This time, jewellery-focused Richemont, standalone giant Hermès and smaller groups like Prada, Moncler, Zegna and Brunello Cucinelli have proved more resilient while LVMH's woes deepened.
Unjustified price hikes — or 'greedflation' — in the group's key handbag category is largely to blame. The group is also navigating a generational shift in its top ranks. LVMH's marketing budgets and clout with landlords remain unparalleled. But in today's fast-changing luxury market, more focused companies appear to have the advantage when it comes to nimble decision-making and execution.
The coming quarters will show whether the conglomerate's current down cycle represents a blip or a paradigm shift.
Vuitton Under the Microscope: LVMH is facing challenges across key units — from layoffs at Moët Hennessey to falling sales at Dior to lacklustre performance at duty-free retailer DFS. But with a designer transition underway at Dior and new management in place at Moët, those works-in-progress are increasingly seen by investors as yesterday's story.
Reviving momentum at Louis Vuitton, the group's biggest and most profitable brand, is now top of mind. 'The biggest luxury brand on the planet and more than half of the group's EBIT seems to be at a crossroads,' HSBC analyst Erwan Rambourg wrote last month in a note to clients. 'The aspirational skew of the brand is unhelpful currently. A schizophrenic pull between low-end (chocolate, beauty) and high-end (exclusive leather ranges), fashion content (Murakami) and more subtle travel-related luxury items begs the question: What does LV really stand for? Who is it targeting? What is its USP?'
The creation of a new deputy CEO position (bringing over former Loro Piana chief Damien Bertrand in March to support chief executive Pietro Beccari) was a 'red flag' signalling challenges at the brand, Rambourg said.
Balancing a variety of messages including hyper-visibility and sophistication, top-end and aspirational price points, core products and brand extensions has long been a part of the mega-brand formula. But another quarter of losing market share to the likes of Hermès and Prada — as analysts are currently forecasting — will lead investors to wonder: What's the plan?
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders' documentation guaranteeing BoF's complete editorial independence.

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But the CFO's office and the personnel department don't always have the same data—down to agreeing on total employee counts—and the information the CFO has is usually based on numbers and location, missing important context like job functions and company plans for further growth. I spoke with Andrea Derler, principal in Research and Customer Value at AI workforce analytics platform Visier, about how everyone in the company can align on its workforce. This conversation has been edited for length, clarity and continuity. In an ideal business situation, what kind of access would the CFO have of personnel data? Derler: To begin with, what type of data does the organization have? How is it currently processed and integrated? I'm exaggerating here, but she's probably not going to be interested in seeing a spreadsheet with 300,000 employees. Ideally, it's in a system where it's easily accessible to the C-suite. The better it is integrated and actually prepared for results and insights, the easier it becomes. These people don't have time to play around with the system for half an hour to get to one insight. What's our headcount? Where's the diversity in terms of women in leadership positions? How does our projected headcount actually affect our ability to meet our targets next quarter? That needs to be really easily integrated. In terms of the detail and what they see, hopefully they'll work with the relevant IT and CHRO teams to understand: Can I have access to this and that because I need it for this and that? The collaborative aspect of all of these decisions is increasingly high nowadays because it's technically possible: Understanding and negotiating access to certain data points and certain business units is really a collaborative effort. There's a basic set of metrics that are always relevant. We need to know who is going, who is coming in the organization, particularly for workforce planning. You always need to know who is where. Engagement may not be the most important one for the CFO because it's further away from proof to say it really affects the bottom line. Closer to that would be how many people do we have? Do we have the right skills, and how is it going to affect our projected revenue next year? What are some of the bigger things that go wrong in companies because the CFO doesn't necessarily have access to good data from HR? We have a massive data set of [about] more 30 million employee records of global industry data. We look at that data constantly. Two years ago, we studied layoffs—reduction in force, turnover, resignation. Most companies have some type of a number we can see in our data. Then I interviewed six CHROs to understand what the decision making process around layoff positions look like? If there's a very short term calculation: I'm going to save this much if I let 10% go in the next three months, what's sometimes missing? Sure, you have the cost savings in the short term, but what's sometimes neglected is what the actual long-term cost is. I'm going to let go 10% now because I think we don't need them anymore, and currently I'm going to have to save some costs. Sometimes, what's not happening is thinking ahead 12 months. We want to grow again after the difficult economic times. Now, I'm going to have to rehire individuals or find new replacement employees. We know that hiring new employees is generally much more expensive than keeping existing employees and helping them either internally to find different roles or reskill them. There's a lot of academic research and also industry research that found that layoffs most of the time are not really financially making sense because the planning capabilities don't always exist. If the CFO knew how much it's going to cost their company to rehire, knowing it may cost a lot more, giving us another headache in two years time, [they may advise against it]. They had only the financial data and said, 'Oh man, we are spending way too much on wages. We're going to have to make some cost savings.' That's for lack of data integration. That's for lack of the ability to collaborate and look at the same data set and do thorough scenario planning, very much to the detriment, not only of the employees who are being let go, but even financially, it doesn't make sense most of the time. What advice would you give to a CFO who wants to make the best financial decisions in the long run for their company when it comes to personnel, and feels like they need to have more access to information? 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If nothing's in place, what's the appetite, and who are the stakeholders that I need to engage with within the company? The third important task that they could do by themselves is list what's missing for me right now in terms of people data. These are the table stakes five questions that I need to be able to answer so I can, as a CFO, make meaningful decisions, or help at least advise the board or others on those decisions. COMINGS + GOINGS Energy services provider Halliburton tapped Stephanie Holzhauser as its new senior vice president and chief accounting officer, effective July 16. Holzhauser was an intern with Halliburton before joining the firm in 2004, and she succeeds Charles Geer Jr. who is leaving the company. tapped as its new senior vice president and chief accounting officer, effective July 16. Holzhauser was an intern with Halliburton before joining the firm in 2004, and she succeeds Charles Geer Jr. who is leaving the company. 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STRATEGIES + ADVICE Businesses do want to make money, but your success and longevity may depend on your ability to do something else: create value for your customers. Here are some ways to make a shift away from pure profit, but possibly a better market position. If you want to add some leadership insight to your summer reading list, here are six books to help you reflect on your shortcomings and learn how to lead your team more effectively. QUIZ Last week, a TV network canceled a top-rated show because it said it was losing money—though critics have wondered if the cancellation had more to do with President Trump's dislike of it. Which show is it? A. 60 Minutes B. The Daily Show C. The View D. The Late Show See if you got the right answer here.