LVMH Dior makes bold move on competitor's CEO
LVMH continues to think of new strategies to reverse declining sales
LVMH has tapped into its strongest competitor's executive team and snatched a key member in hopes of reversing its plummeting sales amid a struggling luxury market.
The French luxury fashion house LVMH is among the many vital strongest competitors of the Italy-based Prada Group. Both companies own a lot of some of essentially the most renowned high-end fashion brands worldwide and have the same, yet exclusive, target market.
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On Tuesday, LVMH (LVMHF) announced that Christian Dior Couture (CHDRF) named Benedetta Petruzzo, former CEO of Miu Miu, as its new managing director.
Starting October 15, Petruzzo will replace Charles Delapalme as managing director and oversee Dior's operations in supply chain and products.
This new team member appointment comes at some point of a time of declining global luxury sales and best months after the free up of Dior's outrageous scandal.
At Tuesday's market close, Dior's stock declined by zero.32% in Paris, and LVMH's decreased by zero.Fifty four% stateside.
The Prada Group (PRDSF) , Miu Miu's fashion house, is likewise seeing red numbers with a superior steeper stock decline of 5.82% at Tuesday's market open. Bloomberg/Getty Images
The Dior bag scandal
Dior is often often often called among the many vital most well liked luxury fashion brands worldwide, with prices best an exclusive target market can give you the money for.
But it, after decades of claiming to be an Italian-made product with phenomenal craftsmanship, Dior became fascinated with a scandal that forever stained the emblem's impeccable reputation.
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In July of this year, an investigation into Dior's supply chain uncovered that the baggage were manufactured in Chinese-run sweatshop-like factories in Italy that engaged in unethical labor practices and prerequisites.
In the same method to the terrible working environment and low pay, it was revealed that one of Dior's clothier bags, which is priced at nearly $Three,000, best cost approximately $fifty eight to assemble, plus $165.5 for leather and hardware, totaling around $223.5 per bag.
The unethical discovery and the label's outrageous price spikes best amounted to its already crumbling finances.
Consistent with LVMH's first-1/2 financial report for 2024, revenue decreased by 1%, and its fashion and leather goods sector declined by 2% when when compared with last fiscal year.
The creation of Miu Miu and its popularity
Miuccia Prada, owner of the Prada fashion label, created Miu Miu as an extension of Prada to be a more reasonably priced, youthful, and playful females's wear line.
No matter the Prada Group's declining stock and the struggling luxury market, the trend house reported outstanding results for the first 1/2 of 2024, with Miu Miu excelling in sales.
Consistent with the Prada Group's first-1/2 financial report, revenue was up 17% YoY.
Because the group's strongest brand, Miu Miu generated a ninety three% growth in retail sales YoY.
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Despite the undeniable fact that other luxury fashion houses are barely keeping their heads above water, the Prada Group seems to be the exception. But it, losing their key team member would possibly signal an end to that run of success.
Petruzzo has been a member of the Miu Miu team since 2020 and was promoted to CEO in March 2023; since then, she has helped Miu Miu upward thrust to popularity and defy the sumptuous downfall.
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