The French giant and the Italian luxury group open the door to generational succession time. How and with what prospects, we tell you in this article
Bernard Arnault has had two wives and five children. Miuccia Prada, a husband and two children. The former head the French giant LVMH (75 brands), and the latter is head, with her husband Patrizio Bertelli, of the Italian Prada group. Both were born in 1949 and will turn 74 this year. And they have decided that the time has come to think seriously about succession.
The time of succession
Arnault is pressing ahead with his plan to transfer his empire to his children and avoid the pitfalls inherent in generational transitions. At the heart of the project is the family holding company, Financiere Agache, which was transformed into a ‘société en commandite‘ last summer. A structure that allows a shareholder with a relatively small stake to have enormous influence. Agache controls Christian Dior SE, which holds 41% of LVMH. The Arnault family owns 48% of LVMH’s share capital and almost 64% of the voting rights. This means that the chances available to a predator intent on taking control of Europe’s most significant company are practically nil. Agache’s shares are equally divided among Arnault’s five sons.
But in reality, Bloomberg notes, there are likely to be confidential pacts. Agache Commandite has a two-year rotating presidency. Delphine Arnault is the first president. All critical decisions on LVMH strategies require the unanimous approval of the Board of Directors. Children cannot sell their shares in Agache Commandite for 30 years without the same approval. In short, a nice padlock to armour the family wealth. “The problem will be even more complicated for the generation after theirs, the generation of grandchildren,” observes Philippe Pele-Clamour, professor at the HEC Paris business school.
Managerial succession
Having secured the assets, Arnault is also working on the succession of roles within LVMH, where all his children work. The latest moves have brought the eldest daughter Delphine to head the Christian Dior Couture brand. She took over from Pietro Beccari, who, in turn, will take over from Michal Burke at Louis Vuitton. A month earlier, Antoine Arnault became CEO of Christian Dior SE. But the succession of roles will be a long process with the hope that the five brothers will always get along.
Prada’s big manoeuvres
The situation is different at Prada, where the successor has already been identified: Lorenzo Bertelli, born in 1988, the couple’s eldest son. His brother Giulio, born in 1990, on the other hand, studied architecture in London but did not complete his studies to pursue his greatest dream: sailing. He has no role within Prada, but the group’s door is always open. In 2021, Miuccia Prada transferred to her sons Lorenzo (50.5 per cent) and Giulio (49.5 per cent) the bare ownership of Ludo, which owns the majority of Prada Holding, in turn, owns 80 per cent of the group.
Then, Lorenzo was appointed as CEO of the Prada group. When? Approximately in three or four years. In the meantime, since last 26 January, Andrea Guerra has taken over as CEO. His main objective is to manage the transition and train Lorenzo. Guerra’s choice also reassured the markets, given his past solid experience in LVMH, Luxottica, and Eataly. If it has not yet arrived, the time for succession is just around the corner. (mv)
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