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December 18, 2012 7:27 pm
Jordi Constans, the newly appointed head of Louis Vuitton, the leather goods business owned by French luxury group LVMH, has stepped down suddenly on grounds of ill health.
He took over from Yves Carcelle, veteran head of LVMH’s flagship brand and its main profits-generator, just four weeks ago. This followed a one-year initiation when Mr Constans, 48, the former senior executive of Danone, the French yoghurt group, shadowed Mr Carcelle.
Bernard Arnault, chairman and chief executive of LVMH, said: “Jordi Constans has shown remarkable leadership which has earned him the respect of the entire team. He understood perfectly the opportunities for this iconic brand. On behalf of the entire group, I wish Jordi a full recovery.”
Mr Constans’ illness was significant and will not allow him to work normally, said a person close to LVMH. Mr Constans is to be replaced by Michael Burke, an LVMH stalwart, who since February has been chief executive of Bulgari, the Italian jeweller acquired by LVMH last year.
Mr Burke is regarded as a safe pair of hands and close to Mr Arnault. In his 26 years at the Paris-based group, he has held senior jobs at Christian Dior Couture and has been a chief executive of Fendi, the leather goods business.
“I am convinced that he is the right leader for Louis Vuitton’s future; he will build on the initiatives launched by Jordi Constans, bringing the vision and drive to continue advancing Louis Vuitton’s leadership position in luxury,” said Mr Arnault.
Louis Vuitton, characterised by its signature logo canvas bags, last year accounted for 27 per cent of group sales but 52 per cent of its profits.
It has grown rapidly under Mr Carcelle’s 22 years at the helm, “showing the extent of the challenge to come for his successor”, said Thomas Mesmin, analyst at Cheuvreux, who calculates that Louis Vuitton has enjoyed a compound annual growth rate of 12 per cent in that time.
“Yves Carcelle changed the brand, turning into the biggest luxury brand name in the world,” he said. Louis Vuitton sales have risen from €635m in 1990 to a forecast €7.5bn this year.
A slowdown in organic sales, particularly in Asia, has raised questions about the ability to sustain its growth rate, given its size, ubiquity and vulnerability to changes in consumer taste.
Antoine Belge, analyst at HSBC, said in a recent note: “While Louis Vuitton benefited from being a pioneer in China up until 2011, smaller brands are now growing faster due to the increasing sophistication of Chinese consumers.”
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