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THE AGENDA Letters Dear Spear’s… Readers have their say on succession, private islands and the art world Family planning SIR – I have been reading Spear’s analysis of the recent developments at LVMH (Spear’s 91) with huge interest. While few successions will be subject to this level of scrutiny, we believe it is a topic that all businessowning families should be thinking about – sooner rather than later. THE ISSUES LVMH THE ISSUES LVMH THE HOUSE OF USE OF ARNAULT AULT The richest man on the planet bestrides his LVMH empire and the world of luxury goods like a colossus. But as he turns 75, Bernard Arnault faces a dilemma: anet bestrides his LVMH xury goods like a colossus. d Arnault faces a dilemma: en should succeed him? which of his five children should succeed him? Words JOHN ARLIDGE Illustration DIEGO ABREU ustration DIEGO ABREU flotilla of barges carrying 10,000 Olympic athletes along In a few months’ time, half a million spectators will cheer a the River Seine to the Eiffel Tower. There they will meet the beau monde of global sporting leaders, politicians and digni- taries, including the richest man in Europe, with a net worth estimated by Forbes to be around €200 billion. Few of the superhuman twentysomethings at the opening ceremony of the Olympics and the Paralympic games in attendance will recognise Bernard Arnault, but they will all be aware of at least some part of the empire he has stitched together to create the world’s largest luxury goods group, Louis Vuitton Moët Hennessy. He prefers to let his brands – 75 of them, including Louis Vuitton, Christian Dior, Tiffany and Fendi – do the talking, and the greatest sporting occasion in the world is no exception to that rule. One, Chaumet, a Paris jeweller, has designed the Olympic medals. Another, Berluti, is dressing the French team from head to toe. VIP guests will sip champagne from Dom Pérignon, which he also owns. will sip champagne from Dom Pérignon, which he also owns. What a golden moment for him. After spending a lifetime cre- What a golden moment for him. After spending a lifetime cre- ating Europe’s most valuable company – with a market capitali- ating Europe’s most valuable company – with a market capitali- sation exceeding €400 billion – he will be at the heart of the sation exceeding €400 billion – he will be at the heart of the French establishment and in the global spotlight. (The price of French establishment and in the global spotlight. (The price of admission to Europe’s party of the decade? A premium sponsor- admission to Europe’s party of the decade? A premium sponsor- ship cheque rumoured to be €150 million.) ship cheque rumoured to be €150 million.) LUXURY INDUSTRY ANALYSTS WILL STUDY THE GROUP FOR BODY LANGUAGE THAT MIGHT INDICATE ARNAULT’S CHOICE OF SUCCESSOR XURY ANALYSTS UDY THE OR BODY GE THAT NDICATE S CHOICE ESSOR It will be a family affair. Arnault will be surrounded by his five children: Delphine, 49, and Antoine, 46, from his first marriage to Anne Dewavrin, and Alexandre, 31, Frédéric, 28, and Jean, 26, a trio he had with his current wife, Canadian-born concert pianist Hélène Mercier. Each man will wear an almost identical Dior navy suit. Delphine will wear a Dior skirt. It has become the family uniform. It will be a family affair. Arnault will be surrounded by his five children: Delphine, 49, and Antoine, 46, from his first marriage to Anne Dewavrin, and Alexandre, 31, Frédéric, 28, and Jean, 26, a trio he had with his current wife, Canadian-born concert pianist Hélène Mercier. Each man will wear an almost identical Dior navy suit. Delphine will wear a Dior skirt. It has become the family uniform. There will be no unseemly jockeying for a podium place with the patriarch, but luxury industry analysts will study the group for body language that might indicate Arnault’s choice of successor. Change is afoot There will be no unseemly jockeying for a podium place with the patriarch, but luxury industry analysts will study the group for body language that might indicate Arnault’s choice of successor. Change is afoot Leadership and strategy issues in a family business can be a source of significant stress, and even conflict. Addressing these questions early on maximises the chances of keeping family assets intact, if that is the right course. As an adviser to families and family offi ces, I’ve seen that these arrangements don’t just fall into place and need to be carefully planned. The involvement of a third party can bring a degree of objectivity and transparency. Clare Anderson global head of Schroders Family Offi ce Service 15/03/2024 09:44 A private function SIR – As the founder of a luxury travel company, I was interested to read Aisha Alli’s article on Necker and private islands in general (Spear’s 91). For a long time, governments have enshrined responsibility for the flora and fauna in their domain. National parks, ministries and nature reserves are standard. Typically, private islands have no such imperative, so I was encouraged to read of the Bransons’ work conserving wildlife on both Necker and Moskito. Private islands are not only whitesanded Caribbean hideaways. Individually owned islands in Norway’s Lofoten archipelago are essential havens for birds and other wildlife. Increasingly, luxury travellers are fascinated by the natural world, rare species and unique 45 15/03/2024 09:45 15/03/2024 09:45 h is to i a n e A F L habitats. I believe islands that value tourism have a strong incentive to protect and conserve the natural environment. Adam Sebba Founder, The Luminaire Paper trail SIR – Your article on the Rybolovlev v Sotheby’s case (Spear’s 91) highlights yet again what is probably the most common and most basic mistake made by art collectors: the absence of a written contract in art transactions. y an The case rather reminds me of the decision of the English courts in Accidia Foundation v Simon C Dickinson Ltd (2010), which concerned the question of fiduciary duties owed by an agent in the reverse situation (the sale of artworks on behalf of a client) and in the context of another questionable art market practice, the net return sales agreement. THE ISSUES Art scandal Ben Lewis explains how Sotheby’s was roped into a bizarre legal dispute between a Russian oligarch and a Swiss art dealer When Russian billionaire Dmitry Rybolovlev is spotted, it is usually in salubrious surroundings over which he enjoys full control. Perhaps he’s gazing serenely out from his $300 million Monaco penthouse; reclining in his Airbus pri- vate jet; applauding in the royal box at AS Monaco, the football team in which he owns a majority share; or celebrating a victory in his $20 million racing yacht, Skorpios, which is named after the Greek island he also owns. But in January, the 57-year-old businessman, whose fortune is estimated at between $6 billion and $7 billion, found himself somewhere less glamorous. He was photographed walking into a Manhattan courtroom. He wore a modest dark navy suit, a coat draped like a cloak over his shoulders and an anxious look. After a nine-year legal battle, in which one development after another had gone against him, this seemed like a final chance to obtain what he considered to be justice. In a courthouse just a stone’s throw away sat Donald Trump, who – along with his company – was being prosecuted for fraud by New York attorney general Letitia James, and who was ulti- mately ordered to pay a $354 million fine. Rybolovlev was also prosecuting an alleged fraud – one he claimed had been com- mitted by Sotheby’s auction house, which he felt merited a sim- IBSON GBARBARA ilar amount in damages: $380 million. The other main player in the legal saga was a Swiss art dealer named Yves Bouvier, a man Rybolovlev claimed had duped him out of $1.1 billion from the $2 billion sale of 38 works of art between 2003 and 2014. Bouvier consistently denied any wrong- doing, claiming he acted as a dealer, free to set his own profit margins, and not as Rybolovlev’s agent. At midday on 11 January, Rybolovlev took to the stand. Eyes glistening, he told the court that his mistake was to trust some- one he had considered a friend. ‘When a person is like a member of your family, there’s a point in time at which you begin to com- pletely and utterly trust a person,’ he said. A written contract could have clarified in what capacity Yves Bouvier was acting and what fiduciary duties, if any, he owed to Dimitry Rybolovlev. Gregor Kleinknecht MEUM Group House masters SIR – Your article on the Rybolovlev v Sotheby’s case shines a light on an international, high-stakes, multi-billion- dollar industry that is o en kept behind closed doors. It would certainly appear not to be an arena for mere mortals. And while Sotheby’s may be delighted that the jury sided with its version of events, this may be a pyrrhic victory if it supports the narrative that the house always wins. The art market has remained static in terms of growth for the past 10 years, stuck at $60 billion (excluding the Covid years), and it relies heavily on the participation of the uppermost echelons of the UHNW community. If auctioneers and others fail to take it upon themselves to address the public perception that there is an information imbalance – which persists because of extreme confidentiality and questionable business practices – it is unlikely to attract many new collectors. If that is the case, the market’s growth will remain stunted. Rudy Capildeo Head of art & luxury law, Wedlake Bell Passing the baton SIR – The intricacies of managing a diversified luxury empire such as LVMH underscore the challenges inherent in passing down wealth and control to the next generation. At Stonehage Fleming we have the pleasure of helping families develop and implement plans for passing on legacies to future generations and have witnessed first-hand the importance of early engagement and mentorship in the preservation of 15/03/2024 14:56 THE DARK ART OF THE DEAL THE DA OF TH 53 in w intergenerational wealth. c e p f a a W The real challenge is ensuring that the purpose of a family’s wealth is articulated, shared and understood. We believe that families who take the time to reflect on their purpose – and engage the next generation in defining and living it – give themselves the best chance of intergenerational success. Matthew Fleming Stonehage Fleming 15/03/2024 14:5 15/03/2024 14:5 To submit a letter for publication in Spear’s, please email milly.rochow@spearswms.com. All correspondence will be considered for publication unless otherwise stated.
page 9

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THE AGENDA Letters

Dear Spear’s…

Readers have their say on succession, private islands and the art world

Family planning SIR – I have been reading Spear’s analysis of the recent developments at LVMH (Spear’s 91) with huge interest. While few successions will be subject to this level of scrutiny, we believe it is a topic that all businessowning families should be thinking about – sooner rather than later.

THE ISSUES LVMH

THE ISSUES LVMH

THE HOUSE OF

USE OF

ARNAULT

AULT

The richest man on the planet bestrides his LVMH empire and the world of luxury goods like a colossus. But as he turns 75, Bernard Arnault faces a dilemma:

anet bestrides his LVMH xury goods like a colossus. d Arnault faces a dilemma: en should succeed him?

which of his five children should succeed him?

Words JOHN ARLIDGE Illustration DIEGO ABREU

ustration DIEGO ABREU

flotilla of barges carrying 10,000 Olympic athletes along

In a few months’ time, half a million spectators will cheer a the River Seine to the Eiffel Tower. There they will meet the beau monde of global sporting leaders, politicians and digni-

taries, including the richest man in Europe, with a net worth estimated by Forbes to be around €200 billion. Few of the superhuman twentysomethings at the opening ceremony of the Olympics and the Paralympic games in attendance will recognise Bernard Arnault, but they will all be aware of at least some part of the empire he has stitched together to create the world’s largest luxury goods group, Louis Vuitton Moët Hennessy.

He prefers to let his brands – 75 of them, including Louis Vuitton, Christian Dior, Tiffany and Fendi – do the talking, and the greatest sporting occasion in the world is no exception to that rule. One, Chaumet, a Paris jeweller, has designed the Olympic medals. Another, Berluti, is dressing the French team from head to toe. VIP guests will sip champagne from Dom Pérignon, which he also owns.

will sip champagne from Dom Pérignon, which he also owns.

What a golden moment for him. After spending a lifetime cre-

What a golden moment for him. After spending a lifetime cre-

ating Europe’s most valuable company – with a market capitali-

ating Europe’s most valuable company – with a market capitali-

sation exceeding €400 billion – he will be at the heart of the sation exceeding €400 billion – he will be at the heart of the

French establishment and in the global spotlight. (The price of

French establishment and in the global spotlight. (The price of admission to Europe’s party of the decade? A premium sponsor-

admission to Europe’s party of the decade? A premium sponsor-

ship cheque rumoured to be €150 million.)

ship cheque rumoured to be €150 million.)

LUXURY INDUSTRY ANALYSTS WILL STUDY THE

GROUP FOR BODY LANGUAGE THAT MIGHT INDICATE ARNAULT’S CHOICE OF SUCCESSOR

XURY ANALYSTS UDY THE OR BODY GE THAT NDICATE S CHOICE ESSOR

It will be a family affair. Arnault will be surrounded by his five children: Delphine, 49, and Antoine, 46, from his first marriage to Anne Dewavrin, and Alexandre, 31, Frédéric, 28, and Jean, 26, a trio he had with his current wife, Canadian-born concert pianist Hélène Mercier. Each man will wear an almost identical Dior navy suit. Delphine will wear a Dior skirt. It has become the family uniform.

It will be a family affair. Arnault will be surrounded by his five children: Delphine, 49, and Antoine, 46, from his first marriage to Anne Dewavrin, and Alexandre, 31, Frédéric, 28, and Jean, 26, a trio he had with his current wife, Canadian-born concert pianist Hélène Mercier. Each man will wear an almost identical Dior navy suit. Delphine will wear a Dior skirt. It has become the family uniform.

There will be no unseemly jockeying for a podium place with the patriarch, but luxury industry analysts will study the group for body language that might indicate Arnault’s choice of successor. Change is afoot

There will be no unseemly jockeying for a podium place with the patriarch, but luxury industry analysts will study the group for body language that might indicate Arnault’s choice of successor. Change is afoot

Leadership and strategy issues in a family business can be a source of significant stress, and even conflict. Addressing these questions early on maximises the chances of keeping family assets intact, if that is the right course. As an adviser to families and family offi ces, I’ve seen that these arrangements don’t just fall into place and need to be carefully planned. The involvement of a third party can bring a degree of objectivity and transparency. Clare Anderson global head of Schroders Family Offi ce Service

15/03/2024 09:44

A private function SIR – As the founder of a luxury travel company, I was interested to read Aisha Alli’s article on Necker and private islands in general (Spear’s 91).

For a long time, governments have enshrined responsibility for the flora and fauna in their domain. National parks, ministries and nature reserves are standard. Typically, private islands have no such imperative, so I was encouraged to read of the Bransons’ work conserving wildlife on both Necker and Moskito.

Private islands are not only whitesanded Caribbean hideaways. Individually owned islands in Norway’s Lofoten archipelago are essential havens for birds and other wildlife. Increasingly, luxury travellers are fascinated by the natural world, rare species and unique

45

15/03/2024 09:45 15/03/2024 09:45

h is to i a n e A F L

habitats. I believe islands that value tourism have a strong incentive to protect and conserve the natural environment. Adam Sebba Founder, The Luminaire

Paper trail SIR – Your article on the Rybolovlev v Sotheby’s case (Spear’s 91) highlights yet again what is probably the most common and most basic mistake made by art collectors: the absence of a written contract in art transactions.

y an

The case rather reminds me of the decision of the English courts in Accidia Foundation v Simon C Dickinson Ltd (2010), which concerned the question of fiduciary duties owed by an agent in the reverse situation (the sale of artworks on behalf of a client) and in the context of another questionable art market practice, the net return sales agreement.

THE ISSUES Art scandal

Ben Lewis explains how Sotheby’s was roped into a bizarre legal dispute between a Russian oligarch and a Swiss art dealer

When Russian billionaire Dmitry Rybolovlev is spotted, it is usually in salubrious surroundings over which he enjoys full control. Perhaps he’s gazing serenely out from his $300 million Monaco penthouse; reclining in his Airbus pri-

vate jet; applauding in the royal box at AS Monaco, the football team in which he owns a majority share; or celebrating a victory in his $20 million racing yacht, Skorpios, which is named after the

Greek island he also owns.

But in January, the 57-year-old businessman, whose fortune is estimated at between $6 billion and $7 billion, found himself somewhere less glamorous. He was photographed walking into a Manhattan courtroom. He wore a modest dark navy suit, a coat draped like a cloak over his shoulders and an anxious look.

After a nine-year legal battle, in which one development after another had gone against him, this seemed like a final chance to obtain what he considered to be justice.

In a courthouse just a stone’s throw away sat Donald Trump,

who – along with his company – was being prosecuted for fraud by New York attorney general Letitia James, and who was ulti-

mately ordered to pay a $354 million fine. Rybolovlev was also prosecuting an alleged fraud – one he claimed had been com-

mitted by Sotheby’s auction house, which he felt merited a sim-

IBSON

GBARBARA

ilar amount in damages: $380 million.

The other main player in the legal saga was a Swiss art dealer named Yves Bouvier, a man Rybolovlev claimed had duped him out of $1.1 billion from the $2 billion sale of 38 works of art between 2003 and 2014. Bouvier consistently denied any wrong-

doing, claiming he acted as a dealer, free to set his own profit margins, and not as Rybolovlev’s agent.

At midday on 11 January, Rybolovlev took to the stand. Eyes glistening, he told the court that his mistake was to trust some-

one he had considered a friend. ‘When a person is like a member of your family, there’s a point in time at which you begin to com-

pletely and utterly trust a person,’ he said.

A written contract could have clarified in what capacity Yves Bouvier was acting and what fiduciary duties, if any, he owed to Dimitry Rybolovlev. Gregor Kleinknecht MEUM Group

House masters SIR – Your article on the Rybolovlev v Sotheby’s case shines a light on an international, high-stakes, multi-billion-

dollar industry that is o en kept behind closed doors. It would certainly appear not to be an arena for mere mortals. And while Sotheby’s may be delighted that the jury sided with its version of events, this may be a pyrrhic victory if it supports the narrative that the house always wins.

The art market has remained static in terms of growth for the past 10 years, stuck at $60 billion (excluding the Covid years), and it relies heavily on the participation of the uppermost echelons of the UHNW community. If auctioneers and others fail to take it upon themselves to address the public perception that there is an information imbalance – which persists because of extreme confidentiality and questionable business practices – it is unlikely to attract many new collectors. If that is the case, the market’s growth will remain stunted. Rudy Capildeo Head of art & luxury law, Wedlake Bell

Passing the baton SIR – The intricacies of managing a diversified luxury empire such as LVMH underscore the challenges inherent in passing down wealth and control to the next generation. At Stonehage Fleming we have the pleasure of helping families develop and implement plans for passing on legacies to future generations and have witnessed first-hand the importance of early engagement and mentorship in the preservation of

15/03/2024 14:56

THE DARK ART OF THE DEAL

THE DA OF TH

53

in w intergenerational wealth.

c e p f a a W

The real challenge is ensuring that the purpose of a family’s wealth is articulated, shared and understood. We believe that families who take the time to reflect on their purpose – and engage the next generation in defining and living it – give themselves the best chance of intergenerational success. Matthew Fleming Stonehage Fleming

15/03/2024 14:5 15/03/2024 14:5

To submit a letter for publication in Spear’s, please email milly.rochow@spearswms.com. All correspondence will be considered for publication unless otherwise stated.

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