LVMH CEO: I'm More Concerned About Marc Jacobs Than Trump
Bernard Arnault, who is optimistic about the president’s proposed lowered tax rates and deregulation, admitted he’s more worried about the American designer.
LVMH CEO Bernard Arnault on Thursday afternoon expressed his concerns about Marc Jacobs, a brand under the LVMH umbrella. Just how worried is he?
“I’m more concerned about Marc Jacobs than the U.S. president,” he said during a conference call to investors, according to Quartz fashion reporter Marc Bain. (Arnault met with Trump two weeks ago at Trump Tower to discuss manufacturing in the U.S.)
"I’m more concerned about Marc Jacobs than the US president." - LVMH CEO Bernard Arnault on conference call a few minutes ago (MJ is in red)— Marc Bain (@marcbain_) January 26, 2017
While Arnault’s ensuing discussion of LVMH earnings centered more on the future of the luxury conglomerate's U.S. sales (Louis Vuitton, Dior and Fendi are just a few of the luxury houses under Arnault's purview), the assertion could shed light on the future of Marc Jacobs, which is currently in the red.
The brand’s rapid expansion, which followed a period of steady growth in the 1990s and early 2000s and included the launch of the Marc by Marc Jacobs line in 2001 as well as cosmetics and fragrances, may have been a bit more than the brand should have bit off. Marc Jacobs International briefly considered an IPO in 2014 after sales were lower than expected. However, the company ultimately stayed with LVMH.
In 2015, the Marc by Marc line was shuttered in what was called a streamlining process. (As seems to be an industrywide trend, however, the beauty collections reported a strong performance in 2016.)
The statement by Arnault — France's richest man — may be more telling about his confidence in President Trump than his fears about Jacobs. He went on to say that as far as Trump’s leadership is concerned, he’s fairly optimistic about the future — particularly with regards to lowered taxes and deregulation. “I think, as things stand now, things are in our favor,” said Arnault, though he cautioned that the second half of 2017 may be a bit rocky. “Despite the fact that the signals have been fairly positive since the start of the year, I am extremely cautious for 2017. In my opinion, it’s always when things are going well that something unexpected happens.”
LVMH reported record-breaking revenue of $41 billion in 2016, with 9 percent organic growth in the fashion division in the fourth quarter.