Anish Melwani, CEO of Moët Hennessy Louis Vuitton (LVMH) North America, kicked off the last day of the National Retail Federation’s annual conference in New York with a talk that touched on blockchain, NFTs, diamonds, luxury trains, and cultivating the artisan talent that the company relies on.
Headquartered in Paris, France, $71.5 billion LVMH owns 75 brands, including Tiffany & Co., Fendi, Marc Jacobs, Sephora, Christian Dior, and Givenchy, among others.
During his keynote session, Melwani said that no company is immune to being impacted by an economic downturn, but that LVMH is well-positioned “to withstand economic shocks.”
Highlights from the session are below.
The Luxury Consumer is Stable; the Workforce Needs Work
The idea that the luxury consumer will not waver, even as economists discuss looming indicators of recession, has been a theme of NRF’s conference this week. Melwani echoed that sentiment, noting that LVMH’s luxury brands do not expect consumer spending to be an issue.
“Once you adopt luxury, once you start wearing luxury as part of your identity, most people don’t want to go backwards,” Melwani said.
He mentioned a few more mainstream LVMH brands, like Sephora and Hennessy, which may see sales declines because they are less luxury-focused, and more democratized. But, on the whole, Melwani said a recession is not a major concern for the corporation.
“There is no such thing as being immune to a recession,” he said. “[But] we’re very conservatively financed, so we have the financial wherewithal to withstandeconomic shocks.”
To ensure it has access to a healthy pipeline of skilled people, Melwani said that the corporation has established a focus on progressing the careers of the artisans who create their handmade products — seamstresses; leatherworkers; and shoemakers, for example.
To help mitigate potential issues, the corporation established an apprenticeship program, called the Institute of Métiers d’Excellence. It focuses on training students in the art of handmade goods.
“Obviously, as the world evolves, continuing to attract young people into those artisan positions is harder and harder,” he said. “I think as our portfolio evolves, this is something that’s important to every part of what we do.”
Expanding into the Travel Industry
While LVMH is primarily known among consumers for its retail brands, the corporation has begun expanding into experiences — mostly in the travel industry.
“2022 was the year where travel really came back. Call it revenge travel, call it the new normal — and we’re still waiting to see how all that plays out. But there’s no question that we saw demand rise dramatically from a travel perspective,” he shared.
In 2019, LVMH acquired Belmond, which operates luxury trains and an exclusive set of properties in iconic locations. It also owns the hotel chain Cheval Blanc. Melwani said those brands have worked in the company’s favor, as travel has been on the uptick.
Melwani said luxury consumers’ attitudes about travel has also been shifting, as their expectations climb and they seek out unique experiences.
“People who have achieved success… the scarcest, most valuable thing to them is their time. Experiences goes into how you spend that time, and how that makes you feel about your accomplishments,” he said. “Fundamentally, this is a progression that we think society has been moving [toward] for a while.”
Luxury’s Place in NFTs and Web3
LVMH brands have begun to make an investment in emerging technologies, especially Web3 and NFTs, Melwani said. The company has hired a team of specialists to help test and roll out offerings that rely on these new technologies.
Tiffany & Co. launched a limited NFT collection, NFTiff, in 2022. The collection included 250 NFTs that enabled users to purchase both a JPG NFT and a physical good — a necklace that mirrors the digital version. The NFTs were priced at $50,000 each, and sold out, landing Tiffany & Co. on the list of the top five brands for NFT sales by revenue.
Melwani said that was a win supported by the company’s culture of innovation, which “is at the core of what we do,” he said.
LVMH also founded the Aura Blockchain Consortium with partners Mercedes-Benz, Prada, Richemont, and OTB, an Italian luxury goods holding company; the partners hope to explore how blockchain can buttress and grow their businesses.
Melwani said that Louis Vuitton launched a product last year that allowed its consumers to purchase certified diamonds, built atop Aura’s blockchain. This, he said, helps consumers ensure their goods come from ethical sources.
“We believe that going forward, especially younger consumers will care more and more about where the raw materials that go into the things that they invest in come from,” he said. “We believe this consortium will provide an industry standard that across luxury brands can be used to give consumers that confidence.”