'Mud on the art market'
A fantastic story about fake art, Bernard Arnault’s moves and fashion’s lack of ideas
In this week’s Dark Luxury news round-up
Bernard makes big moves - again (is he ever going to stop?)
How a preposterously bad fake Monet ended up in one of the King’s charities’ houses
What’s Trump’s favourite cheese?
Why fashion is leaning on the greatest hits at the expense of creativity
How often-secretive “family offices” are creating new risks for luxury
Bernard Arnault’s latest moves
One thing you have to say about Bernard Arnault is that he never stops making moves.
Dana Thomas has the scoop on the LVMH boss’s proposal to increase the age limit for the CEO and chairman roles, both of which he holds, to 85, up from 80. Arnault, 76, previously had the company’s bylaws changed to increase the limit to 80 in 2022. The change requires shareholder approval, but Arnault controls over 63 per cent of the voting rights. “Will Bernard Arnault ever feel his offspring are ready to take over his luxury empire?” Thomas writes, adding, “Seems not.”
One of those stories that you sometimes write as a finance reporter is “billionaire loses billions after stock slump”, and Bernard Arnault is one of those billionaires this week. He’s down $5 billion since the inauguration, but that’s much less than Elon Musk, Jeff Bezos and Sergey Brin, who are all much more exposed to Trump’s tariff to-and-fro. In fact, a decline in LVMH’s share price might not be all that bad for Arnault as he tries to buy up more of the company’s shares with the help of loans.
Arnault may be more focused on the outcome of the former spy chief and LVMH security consultant, Bernard Squarcini, who has been found guilty of using public resources to benefit LVMH, reports Reuters. Squarcini, who plans to appeal, reportedly spied on Hermès execs during Arnault’s attempted takeover of the group in 2010, and filmmaker François Ruffin during the production of documentary film Merci Patron! about the lives of a French couple laid off by LVMH when it moved production to cheaper Poland. Arnault said former LVMH VP Pierre Godé oversaw Squarcini’s operations, and denied instructing Godé.
Champagne and cheese tariffs
What’s Donald Trump’s favorite cheese? Cheesemonger Joe Bangles has made a name for himself by asking celebrities what their favourite cheese is on social media (Lord Sugar, “ultra strong cheddar”, Andrew Neil, “stilton”). Unfortunately for Europe’s cheese industry, which is worried about another round of tariffs from the U.S., his questioning of the president has so far gone unanswered.
Gouda and Edam were mysteriously missed out on the tariff lists in 2019 the last time the U.S. imposed them on Europe, without explanation. Could it be because of Trump or a member of his team? “Even people within the Dutch dairy sector didn’t know why that was the case”, said Thijs Geijer, a senior ING economist covering food and agriculture, quoted in the FT’s story. According to Susannah Savage and Amy Kazmin’s reporting, French champagne and Italian parmigiano cheese makers think American consumers will be unable to afford their products if Trump goes ahead with 25 per cent import taxes. U.S. readers: Clearly it’s time to stock up on Moët and parmigiano.
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Art market mud
How did four fake artworks – including a £50 million Monet, a £42 million Picasso, a £15 million Chagal and £12 million Salvador Dalí – made by convicted art forger Tony Tetro end up on display in the headquarters of then-Prince Charles’ charitable foundation at Dumfries House in Ayrshire? And why did the Prince write an effusive thank you letter to socialite James Stunt, the godson of alleged gangster Terry Adams?
These questions may be answered by the extraordinary story of The Royal Stunt, an upcoming documentary film about how the former husband of Petra Ecclestone, a man who, according to the Times, has publicly admitted to taking drugs and using prostitutes, managed to attract the affection of the future King.
“I’m very sad about this whole story because it casts an enormous amount of mud on the art market in general”, said Georgina Adam, editor-at-large of The Art Newspaper, quoted in Kate Mansey’s write-up. It also raises questions about the Palace’s art experts, the role of letters of authentication (which Tetro reportedly also forged), and the role of charities and the monarchy in legitimising fakes. As Mansey writes, “the fact that the paintings had been displayed in a royal residence would have added to their legitimacy, as often the galleries or locations at which an artwork has been shown will be added to the provenance file when a work comes up for sale.”
Perhaps the oddest thing is just how unconvincing the fakes are. This is Tony Tetro’s interpretation of Monet’s water lilies, one of the paintings which went on display at Dumfries House. You don’t need to be an expert to identify something odd about its overly literal interpretation of the lilies and the water. Nor do you really need to know that the date it was supposed to have been painted, 1882, was a year before the painter moved to the Paris home near the gardens and pond which inspired the series.
Also in the news
What went wrong at Saudi Arabia’s futuristic, luxury Neom metropolis in the desert? The Wall Street Journal breaks down how delays, cost overruns, and the absence of the project’s mastermind Prince Mohammed bin Salman presaged the troubles with the $50 billion project. The WSJ has seen the internal audit produced with the help of McKinsey, which, reportedly, “plugged unrealistically rosy assumptions into Neom’s business plan to justify rising cost estimates”. Huge amounts were spent on fees and salaries for Western consultants, designers, and PR companies. McKinsey alone charged $130 million in a single year. (WSJ)
Family offices, the often-secretive companies which manage the private wealth of the super-rich, are becoming increasingly important in the luxury industry, which is more and more focused on extracting money from ultra-wealthy individuals. The FT’s Josh Spero and Owen Walker reveal some of the problems with this lightly regulated system of offices – which are often staffed by dozens of people – including that criminals are finding “weak spots” to take advantage of them, creating a new source of risk for the financial system as a whole. (FT)
HMRC is introducing a US-style whistleblowing scheme where employees who report tax fraud by their employees will get up to 25 per cent of the tax money that’s recovered. (Dan Neidle)
Fashion’s lack of bold new ideas means that designers are increasingly trawling their archives for ideas, writes Rosalind Jana in 1 Granary. Nostalgia is a powerful force – as we wrote in last week’s newsletter about the second-hand market for handbags. It’s also possible to do nostalgia well, and badly.
HAIM’s cover art inspired by Nicole Kidman is an example of good nostalgia, writes Liana Satenstein in her substack Never Worns, and model Amelia Gray’s spilling milk all over herself in an editorial shoot inspired by Emmanuelle Seigner in Bitter Moon, is an example of bad nostalgia. (Personally, both made us think of Anchorman’s “milk was a bad choice”). (Never Worns)
But there’s a limit to any kind of nostalgia, Jana argues. “A degree of fatigue has set in; a nagging concern, at least among commentators, that legacy is being prioritised at the expense of imagination”. (1 Granary)
Readers of our coverage of a loaded gun in Selfridges may be interested in the Drapers retail crime survey. Staff have told the magazine of criminals stealing £40,000 worth of products, with management failing to take appropriate safeguarding action. We heard similar things from the staff at Selfridges in our story last month. "The bigger national retailers and chains can afford additional security staff. But even that still doesn't seem to prevent or deter retail crime”, said one retail staffer. (Drapers)
A cleaner has appeared in court in London charged with stealing more than £1 million of jewellery, including diamond rings, bracelets, watches and Hermès bags from a member of the Jordanian royal family. (The Times)
Last year the UK received a record number of citizenship applications from Americans, according to my former colleague Sarah Rappaport in Bloomberg Pursuits. That’s still only 6,100 people, but many of them are likely to be buying properties in London over £2 million, a small boost for the capital’s struggling high-end market. (Bloomberg News)
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