The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — Today's game of musical chairs does not involve fashion designers, but rather the business minds leading the commercial charge.
In what is perhaps the greatest executive reshuffle to occur in the industry in some time, LVMH has announced that Sidney Toledano, longtime chief executive of Christian Dior Couture, is stepping down, and will be replaced by Fendi chief executive Pietro Beccari. Meanwhile, Toledano will step into the shoes of Pierre-Yves Roussel, becoming chairman of the LVMH Fashion Group. Roussel will transition into the role of special advisor to LVMH chairman and chief executive Bernard Arnault, effective January 2018. In due time, Roussel will assume "new operational responsibilities" within the LMVH executive committee, of which he has been a member for 14 years, although the details of his new role have yet to be disclosed. Beccari and Toledano will also join the LVMH executive committee. A successor for Beccari, who has led Fendi since 2012, has not yet been named.
According to Arnault, Beccari's appointment signals "a new era" at the house of Dior, which was integrated into the LVMH group earlier this year through a two-part deal worth $13 billion. "Having been an integral member of our group for 12 years, Pietro has an excellent track record," he said in a statement, citing Beccari's work as marketing director of Louis Vuitton and the growth experienced by Fendi during his tenure. "He will be an excellent leader who will steer Dior towards ever greater success in the future."
"[Beccari] has done extremely well at Fendi," said Luca Solca, head of luxury goods at Exane BNP Paribas. "It is one of the brands on the ‘front foot’ in the global soft-luxury landscape."
“It will be difficult to find low-hanging fruits because the job has been exceptional, and therefore there is a need to be even more careful,” Beccari told BoF in an exclusive interview, when asked about his strategy for Dior. “I need three or four months to feel the house, feel the values and start from there.”
Beccari, who will report directly to Arnault, is a natural choice for Dior, given his tenure within the group and his shared Italian heritage with women's artistic director Maria Grazia Chiuri . "I never had the chance to work with her, but we've sat at a few tables together at dinner," Beccari said of their personal rapport. "We have a good energy together. I hope that this good energy will be able to create the connection necessary for the maison to perform. I think the relationship between the creative director and the CEO has to work for the house to work. The fact that we are both Italian, and the fact that we both have experience at Fendi, may make it easier for us."
That good energy may prove invaluable. While the company says Chiuri’s early collections generated a strong response at retail, they have been met with chilly reviews from the fashion press and some industry observers have questioned whether the designer is a good long-term fit for Dior.
“I think it’s definitely a plus, but I believe the fact that I know the group from the inside and [I know] the mechanics of the group is very important,” said Beccari . “We’re living in a very interesting period in the industry in which there are big losers and big winners. What is true today is not true the day after tomorrow. It’s a very challenging moment in a way; you have to be better than the others and get market share from the others in order to survive. I think innovation and speed are exceptionally important in the market today.”
Dior's prosperous fragrance business, Parfums Christian Dior, will continue to be led by Claude Martinez.
Executives from Céline, Givenchy, Loewe, Pucci, Kenzo, Marc Jacobs, Rossi Moda and Nicholas Kirkwood will now report to Toledano, whose tenure at Dior began in 1994, when he was named director of leather goods. Under his direction, Christian Dior released the Lady Dior handbag in 1995, one of the industry's first "It" bags, which helped to catapult the couture house into a global brand.
He was named president and chief executive of Christian Dior Couture in 1998, ushering in an era of significant growth across categories including fragrance, cosmetics and accessories as well as men's and women's fashion. In 2016, the house generated almost €1.9 billion ($2.2 billion) in sales, a 5 percent increase from the year before. Toledano has also managed several creative turning points, including the rise of Hedi Slimane as men's artistic director in the early 2000s, the sudden departure of longtime womenswear designer John Galliano in 2011, the three-year tenure of Raf Simons and the appointment of Chiuri.
"Sidney Toledano is the driving force behind the huge success of Christian Dior Couture across the world," Arnault said. "Over the past 25 years, he has done an outstanding job of developing the exceptional house of Christian Dior Couture and promoting its elegance and modernity through its highly talented team of designers."
“This long, long journey at Dior has been full of success and turbulence, but I believe Dior Couture is on the right track. There has been robust growth and the building blocks are there,” Toledano told BoF. “For me, it was a moment to say, ‘What is the next step?’ If I have to make a change, it’s now, because I am full of energy. All of those brands, most of them have huge potential. When Bernard Arnault asked me to do this, I didn’t hesitate. I think it will be good for LVMH. I think Pierre-Yves did a great job, and now we’ll see how we can continue on. For me, it’s an exciting, new experience.”
In his new role, Toledano — known as a seasoned executive — hopes to continue building on Roussel’s foundation by advising each house leader on operations, brand positioning and brand integrity. “We’ve had success at Dior because of the talent of the designers, but also because of how we merchandise ready-to-wear, bag, shoes and retail,” he said. “I believe that experience is important. It’s easy to make mistakes; it’s not enough to have a hit bag or a hit shoe. You have to reinforce the knowledge.”
Toledano, who mentored several of the industry’s top executives during his tenure at Dior, said that he looked forward to serving as a sounding board for executives who operate within the group. “I want to give guidance,” he said. “I don’t want to do it myself. At Dior, I was so hands on. I want to help them. This is my objective.”
Roussel, who joined LVMH in 2004 as executive vice president of strategy and operations, was promoted to chief executive of the Fashion Group in 2006. His tenure has been marked with significant growth in the Fashion Group, in part thanks to his reinvention of several of maisons, including Givenchy, which saw tremendous acceleration under the creative direction of Riccardo Tisci; Kenzo, where he installed Opening Ceremony founders Carol Lim and Humberto Leon, who ushered the brand back into the cultural conversation with great financial success; Loewe, revitalised by J.W. Anderson designer Jonathan Anderson; and, perhaps most importantly, Céline, transformed by the highly influential work of creative director Phoebe Philo. He also led the acquisition or investment in emerging labels — including Anderson's J.W. Anderson and Nicholas Kirkwood — and managed the sale of Donna Karan International to G-III in 2016.
“Thanks to his leadership, the Fashion Group's various brands have achieved remarkable success over the last 10 years. In particular, he has played an instrumental role in the selection of the best creative talent and in introducing innovative strategies and high-performance teams within the different houses," said Arnault.
A decade ago, Roussel was tasked with scaling the fashion businesses beyond Louis Vuitton and Dior, the company’s cash cows. He was involved in the hiring and scouting of both executives and creatives, and has moved several women into chief executive positions. (Currently, Loewe, Kenzo and Céline are all run by women on the business side.)
“We need the mega brands and we’re really happy with the success of those brands, but I was also convinced that alongside those mega brands there would be an appetite for more,” Roussel told BoF. “It’s been a cycle of 10 years. We tried many things: some things worked really well. If you look at the size of all those brands, many are five, six, seven times the size that they were.”
Roussel's decision to step down may also fan the flames that one of his star recruits, Philo, may be exiting the company at the end of the year. In October, BoF reported that LVMH is interviewing replacements for Philo and rebuilding the design team in preparation for her eventual departure from Céline.
In 2016, LVMH’s Fashion and Leather Goods Group — which includes every fashion maison besides Christian Dior Couture — accounted for nearly a third of the overall business, generating €12.3 billion ($14.3 billion), up 5 percent from €11.7 billion ($13.6 billion) a year earlier and 137 percent from €5.2 billion ($6 billion) in 2006. “We make more profit now at Céline and Givenchy than we were making in sales 10 years ago,” Roussel said. Investments have also paid off. J.W. Anderson had £2 million ($2.6 million) in turnover when Roussel brought it into the LVMH fold. It’s now 10 times that size. “It’s not a question of putting money into it,” he said. “I’ve built an organisation that’s capable of grooming a small brand.”
Today’s announcement also underscores LVMH’s expertise in grooming and retaining executive talent. “They are good at breeding a long-and-strong senior management bench,” Solca said. “They didn’t have to go outside to fill a most important position.”
Next up, of course, is finding the right replacement for Beccari at Fendi. “It will be key,” Solca added.
Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.