“I like the combination of creativity and the creative process with organization. … [+]
It’s not enough to have talented designers, your management team needs to be inspired too.
LVMH founder and CEO Bernard Arnault has brought great management to the luxury industry over the past four decades. In 1984, he bought the retail conglomerate that included fashion house Christian Dior, and now oversees the LVMH empire that encompasses 75 iconic brands across fashion, wines, spirits, watches, jewelry, fragrances, cosmetics and hospitality.
The French engineer, who was named the richest person in the world by Forbes magazine in April 2024, has an estimated net worth of $233 billion and in 2021 acquired American jeweller Tiffany & Co. for $15.8 billion, believed to be the largest luxury brand acquisition of all time.
LVMH’s runaway success reflects the luxury sector’s enduring strength amid economic ups and downs: geopolitical tensions, the cost-of-living crisis and the pandemic have done little to dampen its rise.
In his book, The road to luxuryAshok Som, professor of management at ESSEC Business School and director of the ESSEC-Parsons Executive Master in Luxury Management & Design Innovation (EMiLUX), explains this stability succinctly:
“As long as there are wealthy people in the world, the industry will always be on a growth trajectory. Every time the environment changes, the wealthy get even wealthier.”
He added that rising disposable income for the wealthy has satisfied their basic psychological needs, and as a result, they are shifting their focus to the pursuit of achievement and status. “It’s pretty predictable that the luxury industry and the companies that can operate it well will have a bright future.”
One way luxury brands can take control of the future is by creating immersive, customized experiences for their customers that go beyond just the product.
“By 2030, figure and alpha “It will account for a third of all luxury market spend. To avoid losing exclusivity and uniqueness, many brands are now turning to experiences,” said Dr. Achim Schmidt, Dean of EHL Hospitality Business School.
This allows brands to strengthen relationships with customers and offer unique experiences without sacrificing status or reputation, he adds. Schmidt gives the example of “staying in a Louis Vuitton hotel suite, tasting chocolates in a Cartier boutique, or strolling through a Chanel vineyard. When luxury brands come together and combine their wealth, the experience becomes more unique.”
“Our students understand what a ‘luxury’ product is; … [+]
Luxury brands also partner with business schools to jointly advise and develop the skills the industry needs in future employees, as well as provide students with real work experience and networking opportunities.
EHL has over 30 companies under its umbrella. EHL Alliance – an exclusive global network that includes leading brands such as Four Seasons, Rothschild & Co. and LVMH. “Collaborations like these not only enrich our curriculum, but also open doors for students to embark on rewarding career paths,” says Schmidt.
Professor Fabrizio Maria Pini, director of the Master’s in International Luxury Management at Italy’s POLIMI School of Management, agrees with Schmidt’s thoughts.
“Having this special exposure to companies through business cases and class presentations is a unique opportunity for students to showcase their potential in front of future employers.”
Offered in partnership with Italian luxury retailer Bvlgari and in collaboration with France’s NEOMA Business School, the program prepares students for a range of roles, including product managers, merchandising managers and supply chain specialist purchasing agents.
Nearly half of the internships on the Master’s programme are in the luxury, fashion and lifestyle sector, such as Chanel and Richemont. For Elise Argente Linares, the highlights of the programme are “the incredible opportunities to work closely with brands such as the Prada Group and Champagne Taittinger, as well as the top executive guest speakers.”
These partnerships play a central role in attracting applicants to such programmes by promising valuable learning experiences as well as knowledge and connections that graduates can use throughout their careers. Victoria Metzger, a graduate of TUM Management School in Munich, believes that having the opportunity to present to BMW Group CEO Oliver Zipse while studying for her Master’s in Management and Technology at TUM played a key role in securing her current position within the BMW Group.
She recalls attending a seminar on innovative car production, where lecturer Oliver Zipse asked students to develop concepts to address real challenges facing the BMW Group and then present them to Zipse. “This is something you could never learn in a regular lecture, and it’s the best preparation for working life,” she says.
Victoria’s team developed an idea for a smart city navigation system with a focus on sustainability. The three students were accompanied by two BMW employees as mentors, who helped them develop their idea, guided them through the process and prepared them to present in front of the CEO. “This is something you would never learn in a normal lecture,” Victoria emphasizes. “It’s the best preparation for professional life.”
“Working for BMW has been my dream since I was a child and I thought TUM was the perfect place. … [+]
After completing her Master’s degree at TUM, Victoria will start working in the Direct Purchasing department at BMW Group and will take up a new position in Direct Purchasing at Rolls-Royce Cars in May.
A common theme throughout the luxury learning process is the adoption of a hands-on approach, which requires students to put into practice what they learn in the classroom.
“Your job has nothing to do with glamour,” explains Dr. Achim Schmidt. “Your job is to help other people experience glamour. This small mindset shift is crucial for our students: they learn to appreciate what a ‘luxury’ product is, and develop an appreciation for the products and services associated with it.”
EHL alumna Laura Smadgia-Bouchard, marketing and communications director at Pomellato, said the end-of-year project gave her and her classmates the opportunity to design and lead a project from its inception to client delivery – a real business in the industry. “Not only did this experience sharpen my strategic thinking skills, it also gave me the opportunity to gain a deeper understanding of brand culture and operational nuances,” Laura said.
In addition to imparting practical know-how, these experiences also help students develop the mental toughness to handle and deliver results in situations that often involve great risk. Shima Shiozawa, marketing manager at AIG Japan and ESSEC alumna, said, “My experience at ESSEC taught me how to work well under pressure, how to add value to a team, and how to manage higher levels of responsibility.”
And that value extends beyond the basics of getting the job done to helping the industry continue to adapt and respond to generational changes and global concerns.
“The demand for more conscious, culturally rooted and sustainable forms of luxury will be a fascinating new world to explore,” Professor Fabrizio Maria Pini said.
Sustainability is a key focus of the specialised Master’s programmes offered at TUM’s School of Management, including the Master’s in Consumer Sciences, designed with a data-driven approach to gain a deeper understanding of consumers and their changing demands.
“Understanding the data that reveals customer preferences will enable companies to better design products that meet those tastes,” explains Gunter Friedl, dean of TUM’s School of Management.
“We also know that new developments in AI will play a key role,” he explains. “Bringing generative AI large-scale language models (LLMs) into the classroom will completely change the way we design marketing campaigns.”
Breakthroughs in generative AI like these are creating exciting new opportunities to bring innovation and efficiency to companies like the BMW Group and LVMH. Despite challenges and risks, LVMH is partnering with Stanford University’s Human-Centered Artificial Intelligence Institute (Stanford HAI) to explore the application of AI techniques within its business.
“Artificial intelligence is a powerful technology,” said Antonio Belloni, managing director of the LVMH Group. “We recognize the value it brings to support and complement the human talent, emotion and creativity that are at the heart of our Maisons.”
With their blend of innovation and talent, business schools and luxury brands are natural partners in shaping the future of the industry.
