The fashion establishment scratched its head in 1997 when Marc Jacobs, a young New Yorker known for his grunge-look designs, was named creative director of Louis Vuitton. Though it seems hard to believe now, back in those days Vuitton didn’t sell much besides the matronly handbags and luggage it had been making for over a century.
Jacobs changed all that, and now he is stepping down after presenting his last Vuitton ready-to-wear collection in Paris today. The brand has expanded into ready-to-wear and shoe collections under his influence while bringing in artists such as Takashi Murakami, Stephen Sprouse, and even Kanye West to riff on the brand’s LV monogram. Sales have soared from Shanghai to São Paulo, reaching $9.5 billion last year—and rich profit margins have made Vuitton a money machine for parent company LVMH Moët Hennessy Louis Vuitton (MC:FP).
Yet as Jacobs, now 50, heads off to consider a possible stock market listing of his own brand, Vuitton finds itself once again in need of a makeover. Growth has stalled as shoppers trade up to more-exclusive brands like as Hermès (RMS:FP), now that Vuitton is seen as more of mass-market label.
LVMH Chairman Bernard Arnault earlier this year brought in his daughter, Delphine Arnault, to move Vuitton upscale. Her assignment is seen as an audition—in competition with her brother Antoine—for the job now held by their 64-year-old father.
Which designer might Vuitton turn to next? Speculation has centered on Nicolas Ghesquière, a 42-year-old Frenchman credited with reviving the Balenciaga fashion house. But Ghesquière is embroiled in a lawsuit with Balenciaga’s corporate owner, Paris-based Kering (KER:FP), over allegations that he made derogatory remarks about the brand after leaving his post there last November.
As he did in hiring Jacobs 16 years ago, Bernard Arnault might have a more surprising choice up his sleeve.