LVMH CEO turns to AI amid falling sales

LVMH (LVMHF) founder and CEO Bernard Arnault decided to expand his horizons, moving away from the luxury aisle to go shopping in the world of artificial intelligence.

With the company’s luxury sales slowing and Arnault’s declining net worth, this drastic market shift may be a rescue effort for the nearly four-decade-old company.

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LVMH owns brands in all sectors of the luxury industry, including wine and spirits, fashion, perfumes and cosmetics, jewelry and watches, retail and more.

The company’s extensive portfolio includes prestigious names such as Louis Vuitton, Dior, Fendi, Givenchy and Loro Piana, to name a few, and retail brands such as Sephora and Le Bon Marché Rive Gauche.

Bernard is the majority shareholder and has led LVMH since 1989; the Arnault family owns 48% of LVMH and has 64% voting power.

LVMH’s turbulent sales in the first half of the year

According to the luxury group’s half-year financial report for 2024, revenue fell 1% from last year and net profit fell 15%.

Breaking down its luxury houses, wine and spirits revenue fell 12 percent, fashion and leather goods fell 2 percent, and watches and jewelry fell 5 percent. But despite the decline, perfumes and cosmetics are up 3% and selective retail is up 3%.

Overall, LVMH stocks fell 10.8% from last year.

Louis Vuitton

Recent AI Investments Amid LVMH’s Declining Sales

Recently, Arnault has made several investments in AI through his technology firm called Aglaé Ventures, and in 2024 alone, the CEO has made five large investments.

Although the exact amounts of the investments have not yet been disclosed, they are said to total more than $300 million.

AI startups Arnault has invested in include French startup H (formerly known as Holistic AI), California startup Lamini, New York-based AI-powered digital marketing company Proxima, Toronto-based AI HR platform Borderless AI and France’s AI image editor Photoroom.

While most of Arnault’s investments have been made this year, he previously made some AI investments between 2017 and 2019.

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Is Arnault investing in AI in hopes of increasing his plummeting net worth?

In 2023, Forbes named Bernard Arnault the richest person in the world, with a net worth of approximately $211 billion. He is currently ranked fifth for the title with a net worth of around $190.7 billion.

Although Arnault is still among the top 5 richest people in the world, his net worth has decreased by 9.6% since last year.

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Arnault’s approach to the tech startup world is nothing new; he previously invested in Netflix as a child in 1999, Spotify in 2014 and ByteDance, a parent company of TikTok.

At the 2024 LVMH Innovation Awards, Arnault said he invested in 75 startups in the 1990s because he believes in entrepreneurship and forward thinking.

At this year’s VivaTech, where LVMH is a founding partner, the company showcased its innovations with the help of AI startups to stay on top of the future of luxury.

Dior presented its Astra artificial intelligence platform, which aggregates its customers’ comments and reviews from multiple channels so that the brand can easily identify trends and monitor consumer behavior.

Loro Piana introduced Silhouette, a digital fitting room powered by artificial intelligence, where customers can virtually try on the brand’s clothes to find fashion pieces that best suit their style and complexion.

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