Yahoo Lifestyle Bernard Arnault Feels ‘Wind of Optimism’ in U.S.
This was updated at 6:38 p.m. ET.
PARIS — As his luxury empire emerges from a bruising 12 months, Bernard Arnault would rather be doing business in the U.S. than France.
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Speaking after LVMH Moët Hennessy Louis Vuitton reported a 2 percent decline in revenues in 2024, the business titan praised the incoming government of President Donald Trump, and forecast a “booming” U.S. market would help the group recover this year.
At a press conference at the company’s headquarters in Paris, Arnault was peppered with questions about his presence at the inauguration on Jan. 20, his relationship with Trump and his view on the U.S. leader’s threats to impose tariffs on a wide range of goods.
“Who would refuse an invitation from the President of the United States to attend his inauguration? I think the answer is simple. Furthermore, I have a long-standing relationship with him,” he shot back. “I’ve known U.S. presidents since Ronald Reagan.”
Arnault, who is chairman and chief executive officer of LVMH, met with Trump in 2017, after he was elected for his first term, and subsequently invited the president to inaugurate a Louis Vuitton factory in Texas in 2019.
“Obviously, U.S. authorities are strongly urging us to continue opening factories there and I must say that in the current environment, this is something that we’re seriously considering,” he said on Tuesday.
“I felt the wind of optimism that is blowing there. When you return to France after spending a few days in the U.S., it’s a bit of a cold shower, I must say. In the U.S., you get the feeling that you’re welcomed with open arms,” he added.
Arnault noted that Trump has proposed lowering the corporate tax rate to 15 percent from 21 percent for corporations that make their products in America, while several states propose subsidies for firms building manufacturing facilities.
Meanwhile, France has touted an exceptional and temporary tax on companies with revenues of more than 1 billion euros in a bid to plug its gaping budget deficit, although the draft finance bill is up in the air after it was rejected by parliament, forcing the government to resign in December.
“Unfortunately, in France, we have a tendency to tax companies that are good citizens,” Arnault lamented, adding that this would push companies to move their factories overseas and penalize French workers.
“We did propose other solutions, but there’s so much bureaucracy. That’s why we should do like the United States and appoint someone to slash the bureaucracy a little,” he said, referring to tech entrepreneur Elon Musk, the world’s richest man, being named head of the newly created U.S. Department for Government Efficiency.
Arnault declined to be drawn on tariffs, which Trump often brandishes as a negotiating tactic. “I prefer to act quietly,” he said.
The executive said he was confident heading into 2025 after LVMH revenues were flat in the fourth quarter, with its key fashion and leather goods division curtailing its declines.
The French conglomerate, which owns brands including Louis Vuitton, Dior, Sephora and Tiffany & Co., reported revenues of 23.9 billion euros in the three months to Dec. 31, in line with the same period the prior year. Organic revenues grew 1 percent, versus a 3 percent drop in the third quarter.
By comparison, Compagnie Financière Richemont earlier this month reported a surprise 10 percent revenue uptick during the same period, triggering a rally in luxury stocks.
LVMH said organic revenues in Asia, excluding Japan, fell 10 percent in the fourth quarter. In the U.S., they were up 3 percent, with Europe gaining 4 percent and Japan 8 percent.
Arnault predicted that recovery in China would be slow.
“High-quality products remain highly desirable in China,” he said. “I expect things to gradually return to a more normal situation but it will take two years. It won’t happen immediately. As much as the U.S. will be booming, China, I believe, will take longer.”
In a positive sign, several of LVMH’s brands — including Vuitton and Tiffany — posted double-digit growth in January, he said. Arnault took the rare step of refuting an investigative article by Bloomberg alleging that Tiffany’s performance was disappointing.
“We were forced at Tiffany to let go of a certain number of salespeople who are not very happy, so they’re saying things that are inaccurate and that unfortunately some journalists have reported,” he said.
Arnault said organic revenues at the U.S. jeweler rose 9 percent in the fourth quarter — triple the 3 percent increase for the watches and jewelry division overall — and its Landmark flagship in New York City achieved “record-breaking” results last year.
Tiffany’s overall revenues have doubled since LVMH acquired the blue box brand in 2021, he added. “Therefore, we are very confident. Obviously, there is still a lot to do,” he said. “It requires investment, but every time we renovate a store, the turnover increases by around 25 percent.”
Arnault similarly expressed confidence in Dior, following a recent report by HSBC that the French fashion house’s women’s business is “under pressure.”
Although LVMH does not break out performances by brand, its fashion and leather goods unit posted a 1 percent drop in revenues on an organic basis in the fourth quarter, beating consensus estimates for a 3 percent decline.
“Dior is the leading French couture house owned by a French group. And among couture houses — because we also look at the competition — it is the one that had the best performance in 2024,” Arnault claimed, without providing figures.
He said Dior would be reopening its boutique on 57th Street in New York City this year, in addition to opening a store in Beverly Hills.
However, Arnault declined to comment on rumors that Jonathan Anderson, creative director at Loewe, would succeed his counterpart Maria Grazia Chiuri at Dior. “You are talking about hypotheses and there has been no announcement,” he said.
Although LVMH has named new designers at the helm of Celine and Givenchy in the last few months, and has reshuffled the creative leadership at Fendi, Arnault suggested he was not a fan of designer musical chairs.
“We are fortunate in the group to have the best designers and to keep them for a long time and that’s important because we have a relationship with them that goes far beyond the classic business relationship you see in certain houses,” he said. “There is continuity, which is essential. Having too frequent, rapid changes in these professions is difficult.”
Asked about a spate of management shuffles in the last 12 months, which have seen several of his children appointed to senior positions, he insisted they deserved the promotions.
“We choose the best person for the job and my children are treated the same as everyone else. They don’t enjoy any preferential treatment because we share a last name,” he said.
As part of those changes, Jean-Jacques Guiony, LVMH’s longtime chief financial officer, is to become president and CEO of the wines and spirits division, known as Moët Hennessy, with Alexandre Arnault joining him as deputy CEO, effective Feb. 1.
Organic revenues in the division fell 8 percent in the fourth quarter, capping a year of declines.
“I’m sure they’ll get the business back on track for growth. Let’s give them two years to show what they can do, but I’m pretty confident,” Arnault said.
While organic revenues in the selective retailing division rose 7 percent during the key holiday period, the rise was driven mainly by Sephora. Guiony said DFS lost “several hundred million” euros last year as it was impacted by unfavorable currency fluctuations.
As a result, the travel-retail group announced in November it was shuttering its Fondaco dei Tedeschi store in Venice. Guiony revealed that DFS also sold the Samaritaine Paris department store to LVMH, though he did not specify when the transaction took place.
“The business, which was mostly aimed at Chinese tour groups, is indeed suffering at Samaritaine, and that is why we are taking it out of the orbit of DFS, which specializes in this type of clientele, in order to reposition it in a more general direction,” he said.
That sale contributed to a drop in profitability last year, alongside LVMH’s divestment of its stakes in Stella McCartney and Off-White, Guiony said.
In 2024 as a whole, LVMH posted revenues of 84.7 billion euros. Net profit fell 17 percent to 12.5 billion euros, while profit from recurring operations was down 14 percent to 19.6 billion euros.
Thomas Chauvet, analyst at Citi, said Arnault’s January trading update should be treated with caution, noting that revenues at Louis Vuitton were likely boosted by the launch of the reedition of its collaboration with Japanese artist Takashi Murakami, while the earlier timing of the Chinese New Year may also have pushed forward some sales.
The better-than-expected fourth-quarter performance was therefore “probably not enough to call this an inflection point,” he said in a research note.
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