LVMH and Kering u-turn on accessing government aid
Luxury conglomerates LVMH and Kering have done a u-turn on a decision to place employees on government-backed assistance schemes during the COVID-19 crisis.
Employees at the Paris-based groups, which between them own brands such as Louis Vuitton, Dior, Givenchy, Saint Laurent and Gucci, were told that they would be placed on France's equivalent of the UK Government's furlough scheme.
According to the Financial Times, LVMH employees had already been placed on the so-called “partial activity” scheme across its various businesses, which allows companies to furlough staff or place them on reduced hours.
At Kering, talks had been underway about accessing the schemes but employees have since been informed that this will not be happening.
Both companies backtracked after fellow luxury groups, Chanel and Hermes, said they would not be accessing the schemes in an act of "national solidarity". However LVMH denied its move was motivated by competitors' actions.
The move to access aid was controversial since both companies are led by billionaires - LVMH by Bernard Arnault and Kering by François-Henri Pinault – who are among the world's richest men.
However both businesses have also been contributing to the fight against COVID-19 by converting production sites from fashion to the creation of PPE for health workers (Chanel has also done this) and, in the case of LVMH, converting perfume production lines to manufacture hand sanitiser.
In a statement on the matter, Chanel, which is owned by the Wertheimer family, said: “Our aim is not to weigh on the public accounts so the French state can prioritise help to the most vulnerable companies, and focus its resources on the health system and its doctors and nurses.”
In the UK, billionaire Sir Philip Green has come under fire for furloughing 14,500 of the 16,000 staff at his Arcadia empire. However the business was in considerable distress prior to the crisis and the expectation is that a number of the 550 stores that have been closed during lockdown will not re-open.