How did the world’s richest man put his five children to vie for the LVMH throne?

Bernard Arnault, owner of LVMH Moët Hennessy Louis Vuitton SE and the richest man in the world, set out from an early age to groom his sons to one day succeed him at the helm of the luxury goods group. Currently, the five grandchildren are already vying for the succession of the father, who has already placed them in prominent places to test the abilities of each one of them.

Once a month, Arnault and his five sons have lunch at the company’s headquarters, where they review presentations and pointers for an hour and a half and discuss the future of the brands that make up the company.

To get here, it took decades of preparation. Arno taught his children mathematics, accompanied them on business trips, and took them to negotiations. The dilemma has been magnified: Who will then take control of LVMH, the world’s largest luxury conglomerate, valued at nearly $500 billion?

In January this year, eldest daughter Delphine Arnault, 48, looked set to run the company’s part of the fashion world, after she was appointed CEO of Christian Dior. A few days ago, Antoine Arnault became CEO of the listed company on the ball that owns the family stake in LMVH.

Behind these two are the three children who resulted from Bernard Arnault’s second marriage. Alexander, 30, is already the executive vice president of Tifanny & Co. , with a network of associates and friends that includes rapper Jay-Z and Twitter founder Jack Dorsey. Frédéric, 28, is the CEO of Tag Heuer, while the youngest, Jean, heads marketing and development for Louis Vuitton watches.

They all attended the best schools money can buy, and had the same opportunities. Arnault never indicated who would succeed him, but he did say the decision would be made on “merit,” the Wall Street Journal reports.

For several decades, Arnault has led the family business with two “right-handers”, Sidney Toledano, who heads Christian Dior, and Michael Burke, who heads Louis Vuitton. The directors had another role, perhaps more important than steering what may be the group’s two biggest brands: they served as mentors and examples to Arno’s sons, who worked under Toledano and Burke.

Recently, Arnault decided to consolidate the family’s control of LVMH and turn Agache, the private holding company that controls LMVH, into a “Comande,” a French limited liability company-like business structure that allows the largest shareholders to exercise a significant interest with the LLC. Relatively small turnout.

The billionaire also created a new entity, Agache Commandite SAS, which is owned by five children, each of whom owns 20% of the shares. This company is responsible for managing Agache and thus putting an end to Arnault’s leadership of the company. High impact decisions, such as Agache’s solution, must always win the approval of the five children.

The new company has a presidency that rotates every two years between the sons who cannot sell their shares for 30 years without the unanimous approval of the board of directors. After this period has passed, only Arnault’s direct descendants will be able to hold the shares.

Between the brothers, say sources close to the family, it is important not to show an idea of ​​competition, rivalry or conflict, but rather to avoid discussions about who is better at playing tennis or playing the piano, not least because the father “would not agree.”

On the other hand, with the concentration of greater power in the family, the strengthening of the position of the children, with all the decades-long preparations, it could always happen that the direct succession of Arnault would end up in the hands of an unexpected sixth. Factor.

“More than anything else, he is a pragmatic man. We have to choose the best at a given time, taking into account the challenges. This is what he does with company leaders and managers, and I think it is what he will do with his children. It is not certain that the future leader of LVMH will be one of Arnault’s sons. At no point, in all of the letters, did he tell me, “I should prepare my children to succeed me,” Toledo points out, so the mystery about the future of the world’s largest luxury brand conglomerate remains unclear, even though it’s certainly fascinating.