Sidney Toledano to Step Aside at Dior as LVMH Shakes Up Senior Ranks

By Matthew Dalton Features Dow Jones Newswires

Sidney Toledano plans to step aside after 20 years as chief executive of Christian Dior Couture as corporate parent LVMH Moët Hennessy Louis Vuitton seeks to inject new blood into its senior ranks.

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Wednesday's announcement marks the end of an era at Dior, during which Mr. Toledano, 66 years old, turned the elite brand into a global fashion powerhouse with annual sales of more than EUR2 billion ($2.3 billion).

Pietro Beccari, the current chief executive of Fendi, also part of LVMH, was named to replace Mr. Toledano. Mr. Beccari is highly regarded within LVMH for having engineered a turnaround at Fendi. Under his tenure, sales grew from an estimated EUR600 million to EUR1 billion.

"Pietro has an excellent track record," said Bernard Arnault, the French billionaire who is chief executive and controlling shareholder of LVMH.

Mr. Arnault gave Mr. Toledano a new job as head of LVMH Fashion Group, which manages some of the brand's smaller fashion labels including Celine, Givenchy and Marc Jacobs. Mr. Arnault suggested the move to Mr. Toledano, and he agreed, Mr. Toledano said. He will start the new role early next year.

"He never imposed something on me," Mr. Toledano said in an interview. "I said I want a new challenge."

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Wednesday's move is the first major shake-up at Dior since Mr. Arnault earlier this year spent EUR12 billion to unite the fashion house with LVMH. Previously, the Arnault family owned part of Dior through a holding company that also owned part of LVMH. But Dior the brand was independent from LVMH, even though the companies cooperated extensively under Mr. Arnault's control.

When Mr. Toledano took over at the brand in 1998, annual sales were around EUR200 million. He embarked on a store-building spree and expanded the business dramatically in Asia. He also anchored the company as designers came and went. He clashed with Hedi Slimane and fired John Galliano after the designer was recorded shouting anti-Semitic insults at a bar in Paris. Mr. Galliano apologized and said he was seeking help.

The move elevates Mr. Beccari to one of the top spots in the fashion world and Mr. Arnault's luxury empire. Dior's sales have surged in recent years, propelled by strong demand in Asia. The brand, however, is significantly smaller than French rival Chanel and should have room to grow, says Luca Solca, analyst at Exane BNP Paribas.

"The benchmark for Dior is Chanel," Mr. Solca said. "It has a similar allure and sophistication and it's coming from the same background, which is couture."

The move leaves a leadership hole at Fendi, which has become LVMH's third-largest fashion brand after Louis Vuitton and Dior. Mr. Beccari helped turn around Fendi by boosting its digital-marketing efforts and introducing a line of new bags that could be accessorized with pompoms and shoulder straps.

"The big thing will be how they're going to replace Beccari," Mr. Solca said. "Fendi needs to maintain its momentum."

Mr. Toledano will now devote his attention to smaller brands that collectively comprise a significant chunk of revenue for LVMH and are seen as growth opportunities for the company. The division also houses Marc Jacobs, which has been underperforming in recent years.

"I will have to meet the team, talk with Marc, talk with the CEO," Mr. Toledano said.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

(END) Dow Jones Newswires

November 08, 2017 16:19 ET (21:19 GMT)