>> Some rumors have the Dior job signed and sealed — with Riccardo Tisci at the helm — but according to LVMH head Bernard Arnault, as of this morning, no decision had been made about John Galliano's replacement. “We’re thinking,” he said at the Louis Vuitton show. Suzy Menkes reports: "People close to LVMH who chose not to be identified because of the sensitivity of the subject say [Marc] Jacobs is a possible candidate, but he does the Vuitton thing so well that it would be a risk to move him." When asked whether he had designs on the Dior position, Jacobs replied: "No! I haven’t been asked.” [IHT]
>> Despite the fact that Riccardo Tisci says he's "happy at Givenchy," he's a heavy favorite for the Dior job — and last night, Derek Blasberg tweeted, "I was just told backstage at the Katy Perry concert (of all places!) that Riccardo Tisci is CONFIRMED at Dior." Today, Grazia editor-at-large Melanie Rickey also blogged: "If what I hear coming out from very well placed sources in Paris is true, today Riccardo Tisci, the 35 year old Saint Martins trained, Madonna-loving Italian Roman Catholic boy from Givenchy is to be placed as the creative director at Christian Dior."
Will an announcement come today? Even though LVMH was said not to be in a hurry to name a successor at Dior — and is not legally allowed to until Galliano is fully terminated — Vogue UK reported earlier today: "Rumours have begun on the front row this morning that there will be two major fashion announcements today. The first is supposed to be made by Carine Roitfeld, who is thought to be planning to unveil plans of next project following her departure from French Vogue — does Givenchy or YSL beckon? The second is expected after the Miu Miu show — will Galliano's Dior successor finally be revealed?"
>> While Hermes continues to fight off LVMH and Bernard Arnault — on Friday, Hermes CEO Patrick Thomas said of the conglomerate's advances: “If you want to seduce a beautiful woman, you don’t start by raping her from behind” — another luxury brand has become part of the LVMH stable.
In a €3.7 billion ($5.2 billion) deal, LVMH will take a controlling stake in Bulgari, with the Bulgari family trading in its 51 percent share in the brand. In return, they will become the second largest family shareholder in LVMH, after Arnault. Paolo and Nicola Bulgari will remain chairman and vice chairman of the Bulgari board, respectively, and the Bulgari family will get two seats on the board of LVMH as part of the deal.
Arnault has expressed interest over the past decade in adding Bulgari to his portfolio, and the Bulgari family seems pleased, as well. "This is a significant step for our family as well as for Bulgari, occurring at a time of strong revenue growth,” said Bulgari CEO Francesco Trapani. “Our entrance into LVMH will allow Bulgari to reinforce its worldwide growth and to realize noteworthy synergies, in particular in the areas of purchasing and distribution.”
>> There's been plenty a rumor about who might succeed John Galliano at Christian Dior, and in the video above, insiders give their two cents on who they think will take the role. While the Vogue contingent won't comment, Fabien Baron suggests Riccardo Tisci or Haider Ackermann, Stefano Tonchi offers up Peter Dundas's name, and Cathy Horyn opines, "People talk about Riccardo Tisci, [but he's] too gloomy for Dior," saying she'd instead like to see Tom Ford, Raf Simons, or Alber Elbaz.
Despite all the speculation, Dior is apparently in no hurry to name a successor; it's also not legally able, under French employment regulations, to do so until the process to terminate Galliano — which can take several weeks — has been completed. “There won’t be any choice for quite a while,” according to one source familiar with LVMH. “They’re receiving offers.”
Among the candidates Bernard Arnault's advisers have been pitching, according to WWD sources: Haider Ackermann, Hedi Slimane and Riccardo Tisci. Delphine Arnault, deputy managing director at Dior and Bernard Arnault's daughter, is said to be partial to Tisci. And overtures were apparently recently made to Ackermann as a possible candidate for Dior, or to succeed Tisci at Givenchy if he moves to Dior.
Karl Lagerfeld Is "Furious" with John Galliano for the "Harm" He Did to Dior, Bernard Arnault's "Favorite Label"
>> In her story on John Galliano yesterday, Cathy Horyn wrote of the designer, "In his knowledge of fashion, he was rivaled only by Karl Lagerfeld of Chanel . . ." Spurred by rivalry or not, Lagerfeld has come out completely clear about his thoughts on the Galliano scandal — and these aren't words of support.
“I’m furious, if you want to know," Lagerfeld told WWD. "I’m furious that it could happen, because the question is no longer even whether he really said it. The image has gone around the world. It’s a horrible image for fashion, because they think that every designer and everything in fashion is like this. This is what makes me crazy in that story."
Lagerfeld continues: "The thing is, we are a business world where, especially today, with the Internet, one has to be more careful than ever, especially if you are a publicly known person. You cannot go in the street and be drunk — there are things you cannot do. I’m furious with him because of the harm he did to LVMH and [chairman and CEO] Bernard Arnault, who is a friend, and who supported him more than he supported any other designer in his group, because Dior is his favorite label. It’s as if he had his child hurt.”
Insiders confirmed to the Wall Street Journal that Dior has always been Arnault's pet project — it was the first fashion house he bought when getting into the luxury industry in the '80s — despite the fact that the label didn't begin to turn a profit until 2002 (Galliano joined as creative director in 1996). He has continued to pour money into the brand, which still struggled to improve its bottom line under Galliano: its current sales of €826 million ($1.14 billion) and operating margin of 4.2 percent lag far behind that of LVMH's crown jewel Louis Vuitton, with its estimated €5.5 billion in sales and 45 percent operating margin.
Marc Jacobs Is In Contract Renegotiations with Louis Vuitton; Bernard Arnault Has Veto Power on John Galliano's Dior Designs
>> Robert Duffy and Marc Jacobs are in the midst of negotiating the renewal of their respective contracts at Louis Vuitton, Duffy confirms. But he doesn't expect there to be any problems: “It’s just starting but, I mean, we both want to stay. I don’t think that’s any secret. When two people want to renew their vows, they do it usually.”
It sounds like the feeling is mutual from Louis Vuitton head Bernard Arnault. "I could have asked many other talented designers to do Dior, but it would not have been the same," Arnault told Tatler Asia. "Take Marc Jacobs, he has been a fantastic success at Vuitton, and he has a proximity to the Vuitton spirit, but I don't think it would have been a success with Jacobs at Dior and the other way around, if I had asked John [Galliano] to do Vuitton, it would not have worked. An essential ingredient in the success of the brand today is the real proximity of Galliano to the talent of Christian Dior." Arnault and Galliano meet at the LVMH offices in Paris to discuss each of Galliano's Dior collections before it is shown. "We meet in this room," explains Arnault. "I say, 'John, I think we should do something else. What you have done is too extravagant.' For Dior it's all about the details and John listens."
>> Bernard Arnault is not looking to allay Hermes after his surprise October acquisition of a 17.1 percent stake in the brand. Despite stating that he has no intention of taking Hermes over, Arnault announced yesterday that LVMH now owns 20.2 percent of Hermes shares — assuredly to the Hermes family's dismay, although a Hermes spokesman declined comment.
As the Hermes family collectively owns 70 percent of the brand, there is now less than 10 percent of shares left for Arnault to freely buy. If Arnault wants to continue increasing his stake, it will likely take years to erode family unity and therefore clear the way for a takeover.
>> 33-year-old Antoine Arnault joined Louis Vuitton in 2002 — where he was named communications director in 2007 — and as son of LVMH CEO and chairman Bernard Arnault, has been a member of LVMH's board of directors since 2006. Now, he's reportedly moving over to a much less visible brand under the LVMH umbrella — the luxury footwear brand Berluti, founded in 1895 and known for its distinctive colors and patinas — where he will take up the management helm. [WWD]
>> Now that Bernard Arnault has publicly told Hermes that he won't be withdrawing, the family behind the brand is looking into further defensive measures.
Bertrand Puech, who represents the Hermes family, described Arnault and LVMH's presence as thus: "It's like a mosquito buzzing around, and it's annoying. But it's very difficult to get a mosquito out."
So the Hermes family is considering funneling its shares into an unlisted holding company, which would prevent individual family members from selling their shares to outsiders. This would be an extra defense: Puech heads Emile Hermes, the limited partnership that controls the fashion house and is open only to direct descendants of the founders, which is the current defense in place. The limited partnership's by-laws give the Hermes family decision-making power, even if only one family member remains a shareholder — which means it would be difficult for an outsider to control the company without the entire family's approval.
"The limited partnership is our best defense," Hermes Chief Executive Patrick Thomas said yesterday. "We put it in place for an event like today."
>> Yesterday in Le Figaro, Patrick Thomas, CEO of Hermes, and Bertrand Puech, representative of the Hermes family, in not so many words, asked Bernard Arnault to sell LVMH's newly acquired stake in the company.
Today, in that same paper, Arnault responded: “I don’t see how the head of a publicly traded company is qualified to ask an investor to sell his shares." He continued: "We’ve taken a stake in Hermes for the long term . . . Our presence in the capital of Hermes presents no risk to society nor to family control. Quite the contrary . . . this operation is a completely amicable one, what’s hostile is the demand that we sell our shares!”
Arnault added that LVMH took stake in Hermes to provide "a certain amount of insurance that the brand will remain French." When it was pointed out that Hermes believes the move a clash of cultures, Arnault replied: "Our cultures are, I think, pretty close. LVMH is the world's leading manufacturer of high quality products. Vuitton trunks, dresses, haute couture from Dior, Dom Perignon, Chateau d'Yquem, among other examples . . . We have in the LVMH group a culture of handicrafts. And LVMH, like Hermes, is a family group. I am convinced that we, as a shareholder, could bring a number of advantages to Hermes."
As for Hermes's stance that its performance is better than LVMH, and it needs no help, Arnault said: "If you want to compare numbers, compare those of Hermes with Louis Vuitton. In this case of either growth or the result, the performance of Louis Vuitton is much better. That said, the figures of Hermes are excellent, too."