LVMH strengthens its value chain by starting preparations to build a new research and innovation centre in France. By doing so, the French luxury group hopes to accelerate its process of creating new materials, biotechnologies and digital and data solutions for maximum sustainability of the production chain.
The research centre, scheduled to open in 2024 or 2025, will be located in Sanclay, a peripheral area of France designated by the government for institutions such as research facilities or laboratories. Jean Baptiste Voisin, LVMH's chief strategy officer, emphasised the importance of the research staff: the first step is the full environmental analysis of every stage in the current value chain.
The team based at Sanclay will comprise around 300 employees, including scientists, researchers and coworking start-ups. Its aim will be to innovate the production chain as much as possible, paying special attention to energy consumption, carbon emissions and the lifespan of recycled materials. One of the major challenges the team of experts will face is the almost complete elimination of the use of plastics.
Sustainable Investment
Once the centre opens, LVMH will have almost 1,000 employees dedicated to research and development. The figure is spread across all the group's brands and subdivisions, such as Fendi, Louis Vuitton, Guerlain and Fenty Beauty by Rihanna. The investment of the project has not been disclosed, but sources suggest that it could range between 30 million and 75 million euros, depending on the final size of the project, according to WWD.
LVMH is a leading French multinational luxury conglomerate that owns 76 brands around the globe. Founded in 1987, it is today led by CEO Bernard Arnault.
The group reduced its turnover by 17% in the last financial year to 44.651 billion euros. However, its profitability remained "at an exceptional level". In addition, the increase in online sales experienced during 2020 compensated for the fall in shop closures for much of the year.
In addition, LVMH has published its first "comprehensive social and environmental report". The report highlights the many initiatives that represent LVMH's commitment to responsible growth in the context of the global health crisis. It’s the first time the Group has published a consolidated report on its social and environmental commitments and initiatives.
LVMH already has several contributions in place to tackle greenhouse gas emissions, hazardous waste, packaging, water, energy consumption and transport, is a member of the Leather Working Group, uses Better Cotton Initiative cotton, amongst others. It also takes social responsibilities with the aim of achieving greater gender equality, respecting the individuality of its employees and promoting diversity in its projects.