Latest news with #AlexandreArnault
Free Malaysia Today
12-05-2025
- Business
- Free Malaysia Today
Moet Hennessy woes test Alexandre Arnault's credentials
Moet Hennessy has traditionally served as a cash generator for LVMH, generating nearly US$6 billion in turnover in 2024. (LVMH pic) PARIS : Bernard Arnault's son Alexandre has been handed a daunting task: reviving LVMH's worst-performing unit, the famed Moet Hennessy drinks business, in the midst of a tariff war. If successful, the 33-year old could gain a leg up in the closely watched succession contest among five siblings to lead the US$280 billion luxury conglomerate headed by his father. On Tuesday, Alexandre accompanied his father to Washington, where they attended the swearing-in of Middle East envoy Steve Witkoff, broadcast on local channel Fox 5. US President Donald Trump, who greeted the pair among others at the White House, was heard in the broadcast referring to the younger Arnault as 'the future' and a later meeting with them. LVMH declined to comment on the meeting. All five Arnault children hold management roles in the luxury empire which spans over 70 brands including fashion label Dior and jeweller Tiffany, though their 76-year-old father remains hands-on and has shown no sign of stepping down. Delphine, 50, is CEO of Dior, while Antoine, 47, is head of group communications. Frederic, 30, recently took up the role of CEO of Loro Piana and Jeanne, 26, heads marketing for Louis Vuitton's watches business. Alexandre, the third sibling, previously held a senior role at US jeweller Tiffany, joining Moet Hennessy in February as deputy to new CEO Jean-Jacques Guiony, a trusted adviser to Bernard who was LVMH's finance chief for two decades. The asset-light division, which sells drinks through third-party distributors and whose initials make up half the LVMH name, has traditionally served as a cash generator for the group, generating nearly US$6 billion in turnover in 2024. However, last year, as demand in both the US and China sagged, sales fell for the second consecutive year, while operating profit shrank by one-third. Since champagne and cognac can only be produced in the eponymous French regions, they are subject to US tariffs on imports from the EU, currently fixed at 10% but due to rise to 20% in July. Trump has threatened much higher tariffs of as much as 200% should the EU go ahead with plans to tax bourbon whiskey in an escalating trade dispute. Reinvigorating the business will require both diplomatic and business acumen. 'The true test as a manager is how you manage events through tough times,' said Markus Hansen, portfolio manager at Swiss bank Vontobel, adding that it would be hard to replicate the success of Bernard Arnault. Wealthy clients In their first big internal announcement, Guiony and Alexandre said on April 30 they would cut staff at Moet Hennessy by 13% and concentrate marketing budgets on their biggest global labels, according to a video address seen by Reuters. Alexandre told employees the situation was 'very difficult'. 'Their message seems to be candid,' said Frederic Merceron, labour representative for the Force Ouvriere union, adding that staff were still waiting to hear about concrete proposals to reignite sales. Alexandre also told staff last week he would personally oversee one of the shrinking division's key assets: the Moet Hennessy Private unit that caters for the wealthiest clientele. The unit, which has around 80 employees, offers exclusive experiences and personalised spirits blends for the ultra-rich. It famously sold a cask of Ardbeg Scotch for 16 million pounds in 2022 to a private investor in Asia. 'We've decided to take this business unit… and make it its own entity, reporting to me directly,' Arnault said, according to the video. The emphasis on high-end customers might help moderate the wider impact of tariff threats and flagging consumer demand that is causing the slowest luxury industry growth in a decade. Moet Hennessy's larger base of middle-class clients, however, might be reluctant to splash out on a bottle of Moet if the price creeps above current levels of US$50 or US$60 per bottle because of tariffs, said HSBC analyst Anne-Laure Bismuth. Hidden value? A steady stream of profit from Moet Hennessy, which merged with Louis Vuitton in 1987, for years helped fund Bernard Arnault's acquisitions of brands including watchmaker Hublot and jewellery label Bulgari, and the opening of new stores. Drawing on centuries-old winemaking techniques to sell products like Hennessy XO cognac, known for its curved bottles, and yellow-labeled Veuve Clicquot champagne, the division provided over 40% of group operating profit in the 1990s. 'This unit has been structural for the family, and has enabled the development of the group,' said Mathieu Devers, a representative from the CGT union at Hennessy, employed in the Cognac region. While symbolically important to LVMH, which used the Moet & Chandon label in prestigious sponsorship deals for Formula 1 car racing and the Paris 2024 Olympics, the division's economic contribution to the group has diminished. Wines and spirits last year accounted for just 6% of group operating profit, down from around 20% in 2015, according to figures from Bernstein analysts. If spun off, the division could be valued at €14 billion (US$15.8 billion) once restructured, according to HSBC estimates. Bernard Arnault, who famously tends to cling to his assets, has, however, dismissed the idea: 'Divestment is not on the agenda,' he said in January. HSBC says a sharper focus on 'pure luxury' products such as fashion, leather, watches and jewellery would give LVMH a 'tighter, more coherent portfolio that the market might value more highly'. For Alexandre and Guiony, the clock is ticking. 'Let's give them two years to show what they can do,' Bernard Arnault said after they took up their posts.
Reuters
12-05-2025
- Business
- Reuters
Moet Hennessy woes test Alexandre Arnault's credentials
PARIS, May 12 (Reuters) - Bernard Arnault's son Alexandre has been handed a daunting task: reviving LVMH's ( opens new tab worst-performing unit, the famed Moet Hennessy drinks business, in the midst of a tariff war. If successful, the 33-year old could gain a leg up in the closely watched succession contest among five siblings to lead the $280 billion luxury conglomerate headed by his father. On Tuesday, Alexandre accompanied his father to Washington, where they attended the swearing-in of Middle East envoy Steve Witkoff, broadcast on local channel Fox 5. U.S. President Donald Trump, who greeted the pair among others at the White House, was heard in the broadcast referring to the younger as "the future" and a later meeting with them. LVMH declined to comment on the meeting. All five Arnault children hold management roles in the luxury empire which spans over 70 brands including fashion label Dior and jeweller Tiffany, though their 76-year-old father remains hands-on and has shown no sign of stepping down. Delphine, 50, is CEO of Dior, while Antoine, 47, is head of group communications. Frederic, 30, recently took up the role of CEO of Loro Piana and Jeanne, 26, heads marketing for Louis Vuitton's watches business. Alexandre, the third sibling, previously held a senior role at U.S. jeweller Tiffany, joining Moet Hennessy in February as deputy to new CEO Jean-Jacques Guiony, a trusted adviser to Bernard who was LVMH's finance chief for two decades. The asset-light division, which sells drinks through third-party distributors and whose initials make up half the LVMH name, has traditionally served as a cash generator for the group, generating nearly $6 billion in turnover in 2024. But last year, as demand in both the U.S. and China sagged, sales fell for the second consecutive year, while operating profit shrank by one-third. Since champagne and cognac can only be produced in the eponymous French regions, they are subject to U.S. tariffs on imports from the European Union, currently fixed at 10% but due to rise to 20% in July. Trump has threatened much higher tariffs of as much as 200% should the EU go ahead with plans to tax bourbon whiskey in an escalating trade dispute. Reinvigorating the business will require both diplomatic and business acumen. "The true test as a manager is how you manage events through tough times," said Markus Hansen, portfolio manager at Swiss bank Vontobel, adding that it would be hard to replicate the success of Bernard Arnault. In their first big internal announcement, Guiony and Alexandre said on April 30 they would cut staff at Moet Hennessy by 13% and concentrate marketing budgets on their biggest global labels, according to a video address seen by Reuters. Alexandre told employees the situation was "very difficult". "Their message seems to be candid," said Frederic Merceron, labour representative for the Force Ouvriere union, adding that staff were still waiting to hear about concrete proposals to reignite sales. Alexandre also told staff last week he would personally oversee one of the shrinking division's key assets: the Moet Hennessy Private unit that caters for the wealthiest clientele. The unit, which has around 80 employees, offers exclusive experiences and personalized spirits blends for the ultra-rich. It famously sold a cask of Ardbeg Scotch for 16 million pounds in 2022 to a private investor in Asia. "We've decided to take this business unit... and make it its own entity, reporting to me directly," Arnault said, according to the video. The emphasis on high-end customers might help moderate the wider impact of tariff threats and flagging consumer demand that is causing the slowest luxury industry growth in a decade. Moet Hennessy's larger base of middle-class clients, however, might be reluctant to splash out on a bottle of Moet if the price creeps above current levels of $50 or $60 per bottle because of tariffs, said HSBC analyst Anne-Laure Bismuth. A steady stream of profit from Moet Hennessy, which merged with Louis Vuitton in 1987, for years helped fund Bernard Arnault's acquisitions of brands including watchmaker Hublot and jewellery label Bulgari, and the opening of new stores. Drawing on centuries-old winemaking techniques to sell products like Hennessy XO cognac, known for its curved bottles, and yellow-labeled Veuve Clicquot champagne, the division provided over 40% of group operating profit in the 1990s. "This unit has been structural for the family, and has enabled the development of the group," said Mathieu Devers, a representative from the CGT union at Hennessy, employed in the Cognac region. While symbolically important to LVMH, which used the Moet & Chandon label in prestigious sponsorship deals for Formula 1 car racing and the Paris 2024 Olympics, the division's economic contribution to the group has diminished. Wines and spirits last year accounted for just 6% of group operating profit, down from around 20% in 2015, according to figures from Bernstein analysts. If spun off, the division could be valued at 14 billion euros ($15.8 billion) once restructured, according to HSBC estimates. Bernard Arnault, who famously tends to cling to his assets, has, however, dismissed the idea: "Divestment is not on the agenda," he said in January. HSBC says a sharper focus on "pure luxury" products such as fashion, leather, watches and jewellery would give LVMH a "tighter, more coherent portfolio that the market might value more highly". For Alexandre and Guiony, the clock is ticking. "Let's give them two years to show what they can do," Bernard Arnault said after they took up their posts. ($1 = 0.8886 euros)
Yahoo
12-05-2025
- Business
- Yahoo
Analysis-Moet Hennessy woes test Alexandre Arnault's credentials
By Mimosa Spencer and Tassilo Hummel PARIS (Reuters) - Bernard Arnault's son Alexandre has been handed a daunting task: reviving LVMH's worst-performing unit, the famed Moet Hennessy drinks business, in the midst of a tariff war. If successful, the 33-year old could gain a leg up in the closely watched succession contest among five siblings to lead the $280 billion luxury conglomerate headed by his father. On Tuesday, Alexandre accompanied his father to Washington, where they attended the swearing-in of Middle East envoy Steve Witkoff, broadcast on local channel Fox 5. U.S. President Donald Trump, who greeted the pair among others at the White House, was heard in the broadcast referring to the younger Arnault as "the future" and a later meeting with them. LVMH declined to comment on the meeting. All five Arnault children hold management roles in the luxury empire which spans over 70 brands including fashion label Dior and jeweller Tiffany, though their 76-year-old father remains hands-on and has shown no sign of stepping down. Delphine, 50, is CEO of Dior, while Antoine, 47, is head of group communications. Frederic, 30, recently took up the role of CEO of Loro Piana and Jeanne, 26, heads marketing for Louis Vuitton's watches business. Alexandre, the third sibling, previously held a senior role at U.S. jeweller Tiffany, joining Moet Hennessy in February as deputy to new CEO Jean-Jacques Guiony, a trusted adviser to Bernard who was LVMH's finance chief for two decades. The asset-light division, which sells drinks through third-party distributors and whose initials make up half the LVMH name, has traditionally served as a cash generator for the group, generating nearly $6 billion in turnover in 2024. But last year, as demand in both the U.S. and China sagged, sales fell for the second consecutive year, while operating profit shrank by one-third. Since champagne and cognac can only be produced in the eponymous French regions, they are subject to U.S. tariffs on imports from the European Union, currently fixed at 10% but due to rise to 20% in July. Trump has threatened much higher tariffs of as much as 200% should the EU go ahead with plans to tax bourbon whiskey in an escalating trade dispute. Reinvigorating the business will require both diplomatic and business acumen. "The true test as a manager is how you manage events through tough times," said Markus Hansen, portfolio manager at Swiss bank Vontobel, adding that it would be hard to replicate the success of Bernard Arnault. WEALTHY CLIENTS In their first big internal announcement, Guiony and Alexandre said on April 30 they would cut staff at Moet Hennessy by 13% and concentrate marketing budgets on their biggest global labels, according to a video address seen by Reuters. Alexandre told employees the situation was "very difficult". "Their message seems to be candid," said Frederic Merceron, labour representative for the Force Ouvriere union, adding that staff were still waiting to hear about concrete proposals to reignite sales. Alexandre also told staff last week he would personally oversee one of the shrinking division's key assets: the Moet Hennessy Private unit that caters for the wealthiest clientele. The unit, which has around 80 employees, offers exclusive experiences and personalized spirits blends for the ultra-rich. It famously sold a cask of Ardbeg Scotch for 16 million pounds in 2022 to a private investor in Asia. "We've decided to take this business unit... and make it its own entity, reporting to me directly," Arnault said, according to the video. The emphasis on high-end customers might help moderate the wider impact of tariff threats and flagging consumer demand that is causing the slowest luxury industry growth in a decade. Moet Hennessy's larger base of middle-class clients, however, might be reluctant to splash out on a bottle of Moet if the price creeps above current levels of $50 or $60 per bottle because of tariffs, said HSBC analyst Anne-Laure Bismuth. HIDDEN VALUE? A steady stream of profit from Moet Hennessy, which merged with Louis Vuitton in 1987, for years helped fund Bernard Arnault's acquisitions of brands including watchmaker Hublot and jewellery label Bulgari, and the opening of new stores. Drawing on centuries-old winemaking techniques to sell products like Hennessy XO cognac, known for its curved bottles, and yellow-labeled Veuve Clicquot champagne, the division provided over 40% of group operating profit in the 1990s. "This unit has been structural for the family, and has enabled the development of the group," said Mathieu Devers, a representative from the CGT union at Hennessy, employed in the Cognac region. While symbolically important to LVMH, which used the Moet & Chandon label in prestigious sponsorship deals for Formula 1 car racing and the Paris 2024 Olympics, the division's economic contribution to the group has diminished. Wines and spirits last year accounted for just 6% of group operating profit, down from around 20% in 2015, according to figures from Bernstein analysts. If spun off, the division could be valued at 14 billion euros ($15.8 billion) once restructured, according to HSBC estimates. Bernard Arnault, who famously tends to cling to his assets, has, however, dismissed the idea: "Divestment is not on the agenda," he said in January. HSBC says a sharper focus on "pure luxury" products such as fashion, leather, watches and jewellery would give LVMH a "tighter, more coherent portfolio that the market might value more highly". For Alexandre and Guiony, the clock is ticking. "Let's give them two years to show what they can do," Bernard Arnault said after they took up their posts. ($1 = 0.8886 euros)
CNA
05-05-2025
- Business
- CNA
Moet Hennessy to cut 10% of workforce as luxury slowdown bites
Moet Hennessy will cut its workforce by more than 10 per cent as the newly installed executives at LVMH's weakest division seek to reinvigorate its performance. Jean-Jacques Guiony, Moet Hennessy chief executive, and his deputy Alexandre Arnault told staff at the wine and spirits division last week that they planned to cut the workforce back to 2019 levels. Current headcount of 9,400 would need to be reduced by about 1,200, Guiony said, adding that the division's revenues were at 2019 levels even though costs had increased by 35 per cent since then. 'This was an organisation that was built for a much larger size of business,' Guiony said, in an internal video seen by The Financial Times. 'People realise . . . that this [rebuilding sales] is not going to happen anytime soon.' The reductions would largely be achieved through natural attrition and moving some staff into vacancies in other parts of the organisation, said Guiony and Arnault. They did not give a timeline for the job cuts, which were first reported by French news outlet La Lettre. A Moet Hennessy spokesperson said: 'While Moet-Hennessy's business has returned to its 2019 level, Moet-Hennessy announced yesterday its intention to adjust its organisation and gradually return to its 2019 staffing levels, primarily by managing its natural turnover and not filling vacant positions.' Guiony and Alexandre Arnault, son of Bernard, LVMH's chief executive and chair, arrived at Moet Hennessy in February with a mandate to improve performance amid a depressed global market for alcohol sales. LVMH's drinks division grew rapidly between 2019 and 2022 but has been under pressure since. Moet Hennessy's organic sales fell 9 per cent in the first quarter, compared with a 3 per cent drop across LVMH as a whole. Alexandre Arnault told staff that LVMH had seen a few crises over the years but what made this a 'bit unique' was that all of its biggest divisions were struggling at once. 'Usually at LVMH when wines and spirits are not going well, fashion is doing well or some [other part of the business] is performing differently. Right now things are not going extremely well,' he said. Internal company documents, seen by the Financial Times, show that headcount reductions were on the agenda at Moet Hennessy before its current leadership was in place. Hiring freezes have been in place since the second half of 2023 and managers were looking to cut hundreds of roles last year. At least 70 out of a target of about 100 people were let go in China in 2024, according to communications seen by the Financial Times. 'Things are bad but they will become better. This is a cycle,' Guiony told staff, adding that US tariffs added another layer of uncertainty.
RTÉ News
02-05-2025
- Business
- RTÉ News
LVMH's Moet Hennessy to cut workforce by 10%, FT reports
LVMH group's wine and spirits business Moet Hennessy will shrink its workforce by more than 10%, about 1,200 employees, the Financial Times has reported, citing an internal video message from the division's CEO, Jean-Jacques Guiony. Guiony and his deputy, Alexandre Arnault, son of LVMH owner Bernard Arnault, told staff at Moet Hennessy this week that they planned to cut the workforce back to 2019 levels, the newspaper said, adding that a timeline for the job cuts was not immediately known. Organic sales at Moet Hennessy, LVMH's weakest division, dropped 9% in the first quarter, hit by a slump in its key US and Chinese markets. This dragged other sectors of the luxury goods empire, which encompasses brands from Louis Vuitton to Moet & Chandon. "While Moët-Hennessy's business has returned to its 2019 level, Moët-Hennessy announced yesterday its intention to adjust its organisation and gradually return to its 2019 staffing levels, primarily by managing its natural turnover and not filling vacant positions," LVMH said, according to the FT report. Alexandre Arnault, who has links with U.S. President Donald Trump's family, was assigned the job of helping turn around the group's wine and spirits business in November 2024, a task that could be more difficult now, as 20% reciprocal tariffs imposed by Trump on all European Union goods could have an impact on the company. Last month, the French wine and spirits exporters group said that the sales of French wine and spirits were expected to slide in the US following Trump's tariff announcement.
