In our part of the world, we put a lot of store in family businesses. The lessons we pass down from parent to child become words to live by, philosophies that leech through the generations to become a reference of good sense and judgement in times of crisis or indecision. Some of the world’s most enduring luxury brands are no different in how they view their past. What they call their ‘principles’ are our ‘family values’. In luxury houses, these cornerstones of assayed judgement become cast in stone as the company’s hallmarks, as their brand identities. Of course, by this point, it is difficult to separate the family from the brand. This alchemy of history, family and painstaking craft has long fuelled some of the world’s most renowned family-owned luxury companies.
Since the 1990s however, those companies have been on the decline. The appended family trees of luxury conglomerates LVMH, Kering (formerly PPR) and Richemont look more like those of the Diageos, PepsiCos and Volkwagens of this world: a best-of-the-best brand buffet. Surely now that ‘family-owned’ is on the decline, those still fighting to keep their colours flying must be eager to keep the family in the business.
This has long been a stock question I’ve asked the heads of some of the world’s most prestigious maisons. Even when the business is family, I’ve learned that it isn’t all milk and honey. One sixth-generation CEO, a Scotch whisky scion reminiscing about his family’s path to global prominence, spoke of hard scrabble, years in which one of his ancestors had to work for 20 years before his seven sons and two daughters could even afford the equipment to start their own distillery. As time passed, the family faced increasing pressure from global market forces and his father’s generation inherited the company when they were only in their 20s. Keeping the business under family ownership was, and remains, an immense struggle but one he maintained was worthwhile, for it meant that they remain in control of quality and in effect, of their family reputation.
Those same sentiments were echoed by a sixth-generation heir to one of the world’s most consistently-fêted Champagne houses. A family decision over a century ago established their famed policies about the production and release of their cuvées and vintages. This kind of history can never be replaced by clever branding or even built by marketing strategy. Surely such principled toil and wisdom carries through blood ties and DNA in ways that bind beyond the mere compulsion of profit agreements and shareholder dividends? Surely family members at the table were a requisite rather than a frippery?
Current trends suggest otherwise. The sentimentality of family in the old world of luxury seems to have become just that. One patriarch I met, the third-generation head of the largest luxury menswear brand in the world, told me that keeping family in the business would result in a mess if they let everyone in on the basis of their surname. “I’m sure my own contract wouldn’t have been renewed if I didn’t perform,” he said of his early days in the company. “Only those family members who are qualified and have the capacity will make it.”
There’s something to be said for the bonds that legendary hardships or past sacrifices have created for subsequent generations of the family. But what has become unequivocal is that the heads of these businesses do not put stock in surname alone. Every person I’ve spoken to was clear about one thing: family members are welcome to join the party, provided they are qualified and willing to work extremely hard. While each hinted at familial pride about the notion of the next generation taking over, they were equally aware that the operative word in ‘family business’ was the latter, not the former. “We would like the next generation to be involved,” one of them told me, “but we have to be careful about how generational change and succession is managed. It’s such a sensitive thing.” Perhaps that silver spoon is not quite as shiny as it’s cracked up to be?
