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LVMH is going through a tough transition phase. Not only is the French luxury giant facing the worst downturn in decades, it’s parted ways with roughly half of its executive committee since the beginning of the year. This week, another head rolled: that of Chantal Gaemperle, LVMH’s powerful head of human resources and synergies and one of the closest lieutenants of controlling shareholder and CEO Bernard Arnault. Gaemperle was abruptly dismissed, along with Alessia Gargano, HR chief of the group’s beauty division.

What’s going on? Arnault, who has a reputation for staying cool and calculating, has been making mistake after mistake. “Arnault has been making some really strange decisions recently,” one former close associate said, citing as an example the recent flurry of management changes at the group.

It looks as though the 75-year-old luxury king is no longer as well advised as he was before – when all his trusted captains were standing by his side. In the past year, he has let got go of many key individuals as part of his grand plan to rejuvenate the group’s leadership. That process happened quite quickly, perhaps more than would have been reasonable. Identifying young leaders of the same caliber and with the same deep understanding of the luxury sector to replace the veterans Arnault recently pushed out is proving more difficult than he perhaps initially expected.

The list of blunders Arnault has made recently is getting long and risks damaging LVMH’s reputation and ability to attract young talents, sources say, citing concerns expressed by senior leaders at the group. In September, French media outlet La Lettre published a copy of an email Arnault sent to staff in January banning them from talking to journalists from independent media such as La Lettre, Miss Tweed and other ad-free publications such as Le Canard enchaîné and Médiapart. That ban backfired and portrayed Arnault as an opponent of freedom of the press, one of the pillars of our democracy. It also exposed his drive to control the largest number of media possible. His empire already includes Les Echos, Le Parisien and the recently acquired Paris Match.

Such attitude towards the media is revealing of Arnault’s authoritarian streak and makes him look like he does not want anyone to write about the group’s harsh corporate culture and management upheavals happening within his group. There is a fine balance between being loyal to your company and keeping its strategic secrets to yourself and fulfilling your basic human need to share your experience with others, particularly when you’ve been mistreated. Richemont and Chanel share with LVMH the same secrecy-at-all-cost kind of internal policy.

LVMH likes to portray itself as a well-wishing group but the reality is that the mentality is very top-down. Arnault does not welcome feedback or criticism and allows senior managers to humiliate and mistreat others. LVMH is the industry leader and best-in-class in many aspects of the luxury business such as retail, advertising and customer service. But its performance would be even stronger if there was more of a team spirit – like in the French Navy – and staff trusted one another without having to worry about being potentially backstabbed. Admiral Loïc Finaz, former head of France’s War School and captain of a nuclear submarine, explained how the naval crew spirit can help reform the luxury industry in the book La liberté du commandement, L'esprit d’équipage, which he presented at Miss Tweed’s Luxury at the Summit in April 2023. (Link to see his conference)

La Lettre and Miss Tweed both reported on Thursday that Gaemperle was fired. Gargano was dismissed without any justification and asked to leave the building on Tuesday while Gaemperle was ousted on Nov. 1, several sources said.

Both were escorted to the door by security guards. Such brutal methods shed light on the ruthless corporate culture that has taken hold at LVMH. “It’s the LVMH method,” one source close to the group said. “Security guards force you to take your things and leave the building immediately.”

Parting ways with Gaemperle was not an easy decision for Arnault. The 62-year-old Swiss national was his confidant and served him in a very loyal fashion for 17 years. She was the mastermind behind his plan to rejuvenate the group’s top leadership. She had also done a lot of work to promote craftsmanship and develop training programs for artisans.

“They have a very close, almost symbiotic relationship which few people at the group understand,” one source close to LVMH told Miss Tweed a few months ago about Gaemperle and Arnault. “Sometimes it looks as if Arnault is under her spell, he trusts her judgment more than that of anybody else.”

However, Gaemperle’s exacting demands and management methods were increasingly frowned upon internally, particularly by Arnault’s children. Also, the group’s HR supremo did not really see eye to eye with Stéphane Bianchi, Arnault’s new strongman and managing director of the group who replaced Toni Belloni earlier this year, industry sources say.

Bianchi and Arnault’s children also disagreed with some of Gaemperle’s nominations, such as that of Pierre-Emmanuel Angeloglou as VP of the Fashion Group, who was later appointed has as CEO of Italian fashion brand Fendi. “It’s open war between Chantal and Arnault’s children,” one source close to the group said several months ago. In July, La Lettre published a story saying that Gaemperle was losing Arnault’s support.

She was known for demanding gifts from CEOs of the group’s brands and borrowing luxury items such as jewelry pieces that she would not return. Gaemperle’s behavior was becoming increasingly embarrassing for the group and an internal inquiry was launched to gather details. “Arnault could not afford to keep Chantal,” one senior industry source said.

Officially, LVMH staff cannot accept presents from brands and people from outside of the group but this rule does not apply to gifts from brands within the French group. “At Christmas, Chantal’s office was always full of gifts from the CEOs of brands,” the former head of one of LVMH’s brands told Miss Tweedon condition of anonymity. “Some executives felt they had to do that to remain in her good books and keep their jobs.” Some sources close to LVMH said her habit of piling up presents was the excuse the group used to kick her out.

Miss Tweed has received messages from people saying they were pleased to hear she had finally been given the boot. “Many staff hated her,” one person who still works for the group said. “I think a lot of people are super happy she’s finally gone.”

It’s not yet clear who will replace Gaemperle. Arnault’s children would like an external hire to bring a fresh perspective. But there could also be some internal candidates. One of them is Olivier Sastre, who is deputy managing director at Christian Dior Couture in charge of human resources and sustainable development. “Sastre has Delphine’s complete trust,” one person close to LVMH said. “He would be a strong candidate.” But there could be others too.

Another senior person who was pushed out is Jean-Jacques Guiony, the group’s longstanding chief financial officer. Arnault started to resent Guiony’s criticism of his strategy and thought it was also time for him to leave.

At Belloni’s goodbye party last spring, Arnault publicly humiliated Guiony, saying that “at least he (Belloni) knows his numbers,” implying that Guiony did not. Many staff were shocked to hear Arnault say that. Guiony is set to be replaced by Cécile Cabanis who was Danone’s CFO.

LVMH said Cabanis had has strong experience in mergers and acquisitions. However, some people in the industry say her track record in terms of acquisitions at Danone was not particularly stellar. She will replace Guiony next year. Several people close to LVMH say that Cabanis is good friends with Xavier Niel, partner of Delphine, Arnault’s oldest child and CEO of Dior. Niel referred her to replace Guiony, several sources said.

Last week, Arnault let Stéphane Rinderknech, head of LVMH’s beauty and hospitality division, sack Gargano, HR head of the beauty division. Several people close to the group said Gargano was getting complaints from employees that made Rinderknech look bad. One of them was that Rinderknech treated staff with disrespect and had a habit of promising people jobs they would never get – even after moving with their family to the city where they were supposed to work. Gargano was left with the thankless task of having to explain to them why Rinderknech had changed his mind.

As Rinderknech’s erratic management style became well documented, the executive got rid of Gargano, helped by Maud Alvarez-Pereyre, currently LVMH’s chief people and transformation officer. “That could have never happened while Chantal (Gaemperle) was still there,” one person with knowledge of the situation said. Gargano was brutally ousted from the building by Alvarez-Pereyre and given no reason for her dismissal, several sources said.

Alvarez-Pereyre is close friends with Rinderknech’s sister and was the one who suggested to Belloni that LVMH hired hire him to oversee the group’s beauty division. Rinderknech, who spent 21 years at L’Oréal, joined LVMH in 2022 to oversee the group’s hospitality division. He could not work immediately in the beauty field because of the non-competition clause in his contract with L’Oréal which lasted a year.

In 2023, Rinderknech took over the beauty division. Many people at LVMH were surprised he was hired in light of the moral and sexual harassment cases against him at L’Oréal which are public knowledge.

There have also been reports of moral and sexual harassment at Moët Hennessy, LVMH’s wines and spirits division. Bloomberg and La Lettre reported last month that Philippe Schaus, the head of the division, was leaving. LVMH denied that was the case. Up until now, it’s not clear what’s going on at Moët Hennessy and whether Schaus will leave or not.

Gaemperle and Gargano are not the only ones to have been brutally dismissed. In June, Charles-Henri Levaillant, CEO of Make Up For Ever, was also ousted without warning, several sources close to the group said. “Levaillant had complained too openly about how things were run at the beauty division,” one source close to the group told Miss Tweed after he was sacked.

Within a few days, Levaillant was swiftly shown the door, several sources said. Levaillant could not be reached for comment.

Once it’s official, Gaemperle’s departure will mark the end of an era. “For LVMH, her exit is no less than a tsunami,” one industry source said. “People did not expect it,” another one said. “It’s like there is a revolution going on inside the palace.”

Maybe Arnault needs to stop being paranoid about what journalists write about his group and just explain to staff, partners and shareholders what his plan is. Such transparency is not his style but in 2024, being too authoritarian and trying to mask things can backfire, as did his blacklisting of journalists. LVMH declined to comment for this report.