Hi, and welcome back to Line Sheet, the “email of record,” according to… my friend Mattie.

Jeez, there’s so much going on this week, I tried to pack as much in here as possible. Keep reading for some scoopage on the ongoing Saks and Neiman Marcus deal drama, Condé layoffs and party plans, Phoebe’s second drop, and more. Plus, the state of play at LVMH.

🎁 Programming note: As mentioned previously, I’m going to include a guide to gift guides sometime soon, so if there’s a guide that’s really good and you want me to mention it, please send. (Yes, I already have Kaitlin Phillips’s Google Doc on my list.)

Hope to see you on Saturday in Los Angeles at the Balenciaga show. No, I don’t know where it is. Quit asking me! All I know is that it’s in Los Angeles, not an hour outside of the city or whatever. Easy.

Finally, the best gift you could give is a subscription to Puck. Use my code LINESHEET for a meaningful discount.

Mentioned in this issue: Antoine Arnault and the Arnault Clan, LVMH, Richard Baker, Saks Fifth Avenue, Jezebel, Josh Jackson, Condé Nast, Roger Lynch, Phoebe Philo, and more.

• Condé layoffs commence: The stress levels at One World Trade are near an all-time high this week as layoffs get underway in “corporate functions” and “content,” with employees from soon-to-be-disbanded Condé Nast Entertainment having already been shown the door. (My partner Dylan Byers reported earlier today that both Vanity Fair and the New Yorker are getting hit, too.)

  Folks are hearing that Monday, December 4, is going to be a “big day,” and union members were told that affected employees will essentially be given a month’s notice to transition out of the business. (The union is insisting, though, that these layoffs remain illegal because they are currently in contract negotiations with management. Shrug.)

  In typical Condé fashion, the flow of information, both within the building and to the Times, has made a rough situation unbearably worse.

  In retaliation, the union has planned some “lunch outs,” which apparently entails asking members to put up an away message on Slack and have lunch together in the cafeteria. I’m not a protestor type, but this doesn’t really seem like a persuasive activity, though maybe they’re trying to tone it down after employees twice stormed C.E.O. Roger Lynch’s office. (I asked a press rep for the union why they were doing this, and they didn’t respond to me.)

  Hilariously, the whole company was invited to a meeting on December 14 to celebrate “our U.K. teams coming together in the new year,” with the Vogue House crew in London moving to the way-less-interesting Adelphi building. The event will be livestreamed so that employees in all regions can participate. I know it’s been years since Si Newhouse hosted his famous annual executives lunch at the Four Seasons, but we have reached new lows.

• Phoebe Second Drop: Better, non? A little weirder, in a good way. I hope the pants go on sale at some point. There was one unforgivable website malfunction that I heard about and then checked myself. On the “State” drop-down on the order form, there is no Washington, D.C., no District of Columbia. And you can’t leave it blank without proceeding. My friend who lives there abandoned her shopping cart, which was filled with a pair of $1,800 trousers. Has anyone else in our nation’s capital experienced this?

• Wanna guess how much Paste paid for Jezebel? Someone said $150,000. Other peanut gallery responses to the New York Times story announcing its acquisition from the bros at G/O Media:

• “Good luck to this man,” re: Josh Jackson, the editor-in-chief and co-founder of Paste, a once-hot, Atlanta-based pop culture publication, whose parent company, music retailer Wolfgang’s Vault, also acquired defunct political website Splinter from G/O.
• “Nothing has ever said ‘I live and work in Atlanta media’ more than this piece.”
• “Depending on the price it was a good bargain to get your name in The Times.”
• “The picture of stacks of Paste magazines really said, ‘Wow there really is nothing to this story.’”

Okay, these were all from the same person. Not Chris Black.

• Finally, a quick update on my Saks story…: I had a feeling Saks Fifth Avenue owner Richard Baker’s ambitions to buy Neiman Marcus Group had been put on ice… and, well, I may have been right. A source close to NMG tells me that Hudson’s Bay Company’s latest offer to buy the Dallas-based department store group, which also owns Bergdorf Goodman, was rejected by the NMG board. HBC was able to raise $2 billion in new funding from two sovereign wealth funds in the Middle East, as I’ve reported before. But I’m told that Neiman Marcus wants a higher number than what was offered for the business overall, which would require HBC to raise even more debt financing than it has already raised.

  While the NMG source has written off HBC’s chances of advancing, those in the HBC camp say that the negotiations are still underway. And, anyway, there is no way a deal would be finalized during the holidays, the most important revenue moment of the year for retailers. (A representative for NMG declined to comment. A representative for HBC also declined to comment.)

  Of course, these rejections can be construed in different ways, and my guess is that HBC won’t take no for an answer, and will keep trying for the deal. (They are spending a lot of money on consultants and lawyers to try to make it happen.) Some feel it’s inevitable that these two groups will eventually merge because of the changing use case for physical retail. (People use stores to try stuff on, so you don’t really need two stores in one mall carrying the same things.) And ya know what? Department stores have been consolidating since the 1970s. On the other hand, competition is a good thing, and if both Saks and Neiman are able to profitably service their customers over the next couple of years, it could result in a better shopping experience for everyone.

  Meanwhile, in tangentially related news, Saks.com C.F.O. Vince Phelan is leaving the company. He told employees that he has another job. (Remember, Saks, the e-commerce site, has been a separate company from HBC since 2021. But you knew that already.)

But Sartori went back to Zegna in 2016 when he was given the chance to be the artistic director of the entire house, a once-in-a-lifetime opportunity for a certain kind of Italian menswear designer. Antoine then appointed Haider Ackermann, one of the most celebrated designers of his generation, but that quickly ended after two years. Kris Van Assche, who joined after a decade designing Dior men’s, only lasted three years.

Free of a creative director since 2021, the brand’s $1,210 white sneaker has given it a lift, replacing Loro Piana’s soft-soled ankle boots as the footwear of choice for many wealthy men who no longer had to wear suits to work post-Covid. Berlutti makes an estimated €150-200 million a year in annual revenue, up from €30 million when Antoine took over all those years ago. According to an LVMH representative, Berluti is profitable, with sales multiplying eight times since Antoine’s arrival at the brand, which would put them at €240 million a year. That’s a nice increase, but it’s hardly been a runaway hit.

Instead, Italian knitwear label Loro Piana (an acquisition Antoine orchestrated) and Rimowa, the German luggage maker ushered in by Antoine’s younger half-brother, Alexandre—who was also Rimowa’s C.E.O. for a time—were the decade’s big success stories.

There is always a chance that Antoine is moving on to a larger position within the business, one that suits his skills as a communications strategist. (As I mentioned in a previous note, his leading role in the Paris Olympics partnership, a momentous branding opportunity for the group, is a full-time job in itself. And he also helps manage the family office.) An LVMH rep vehemently denied that Antoine’s exit from Berluti was any sort of demotion, calling the idea “complete bullshit,” or that it’s connected to the work he is doing on the Olympics. “There are lots of things coming soon, especially for Antoine.”

But the departure comes at a unique time for LVMH, and patriarch Bernard Arnault, who, at 74, is facing some of the biggest business challenges of his life.

Tiffany’s two biggest markets, the U.S. and China, are sluggish, and the glow-up architected by Alexandre—including a $500 million-plus renovation of the brand’s historic Fifth Avenue flagship as well as new marketing and collaborations with Nike, Supreme, and Rimowa—has not aged well, either. While LVMH executives profess that they have finally figured out America over the past half decade, citing a revival at Marc Jacobs (valid and real) and early revenue jumps at Tiffany, the truth is that most senior LVMH leaders are only truly familiar with California, New York, and Texas. How the rest of the country consumes remains a mystery to them.

And while the press tends to focus on the group’s fashion, accessories, and fine jewelry brands, the less glamorous segment of the business—wine and spirits—is suffering worst of all, especially in the U.S., with one person close to the company suggesting that Hennessy in particular could have been down as much as 20 percent in the latest quarter from the same period a year earlier. (LVMH declined to comment.)

LVMH, of course, is going to be just fine. The group has very little competition. It’s an incredibly profitable business, with an EBITDA margin of more than 30 percent in 2022. And while there are questions about whether the group’s top brands have become too homogenous for increasingly discerning consumers, especially in Asia, the depth and breadth of what they offer ensures that there is something for everyone who can afford it. And because French and Italian executives traditionally think more long-term than their American counterparts, mechanisms are constantly being put in place to ensure there is interest in the brands 20 years from now, not just 20 months from now.

Fifteen years ago, amid the recession of 2008, Bernard Arnault was the 13th-wealthiest person in the world, according to Forbes, with a net worth of almost $26 billion. This past April, he was named the richest man in the world, worth $211 billion. He has since been surpassed by Elon Musk as LVMH’s stock has fallen in recent months, and is currently worth $188 billion.

That rise in status is proof of Arnault’s concept: He took the cold, ruthless approach of America’s most villainous corporate raiders and added a layer of French intellect to it. He craftily bought up broken things (at the time, hollowed-out luxury brands like Dior and Berluti), hired top creative and executive talent to make them into something more, and held the assets rather than flipping them. Arnault saw that consumer culture was becoming the center of popular culture. Today, because of the time, money, and effort he invested, his brands are at the center of it all.

Increased wealth and power have brought increased fame, too, with the New York Post, Daily Mail, and other tabloids tracking every move of Arnault and his children. But it’s not only lunches with Musk at LVMH-owned hotels in Paris that are being scrutinized. In his eighth decade, Arnault is now a geriatric, although he has made it clear that he has no plans to retire. He has his cadre of deputies—the “French Mafia,” including Michael Burke and Sidney Toledano, and the “Italian Mafia,” including Toni Belloni and Pietro Beccari—still surrounding him. But now is a time to invest in the future, and his children, all five now working in the company, are part of that.

The two youngest boys, Frédéric (C.E.O. of watch brand TAG Heuer) and Jean (director of watches at Louis Vuitton), are also catching up fast. Then there’s Delphine, the still-new C.E.O. of Dior, the eldest of them all and the only woman. Dior is a complicated beast, surely as challenged in the U.S. as Louis Vuitton right now. (I’ve heard from sources that other retail partners in the U.S. in particular were not thrilled by Dior’s holiday window deal with Saks, for instance, which could be a headache for her.) And as one person close to the Arnaults put it, “descendants are never as hungry or shrewd as the empire builder.” Delphine may be the shrewdest of the lot, but these next few years will show whether she is the hungriest.

At the end of the day, so-called “wins” are the ephemeral points on the scoreboard measuring these grown children. Most people who have created $400 billion empires, or thereabouts, eventually realize that none of their children—who are inevitably soft, far removed from the chills of failure, etcetera—are equipped to manage them. Let’s see if Arnault comes to this conclusion, too.

What does this all say about Arnault, who is acutely self-aware? (“He reads everything that’s written about him,” an executive once told me, including this.) Whatever Antoine’s exit from Berluti means, it means something. The decisions that Bernard makes over the next few months might be the most important of his career. He may be too big to fail, but he’s not the type to languish.

Farfetch seems to be plotting a take-private. Its shares plunged anyway. What a mess; good luck to all of those involved, it still seems like the best option. [Financial Times]

A Line Sheet reader asks, How did Jenna Lyons and Reed Krakoff get jobs at private equity firms? I guess my response would be, How does anyone get a job? Important to note that Lyons is joining FundamentalCo., a branding agency spun out of Blackstone by its managing director in charge of branding, Jonny Bauer. [Bloomberg]

You know, he’s usually right. [Menswear Guy on Twitter]

Just wow. [Giorgio Armani’s Instagram]

Shein has confidentially filed for an I.P.O. target valuation that could be as much as $90 billion. [New York Times]

This is how I want to see Jennifer Lawrence dressing all the time. [Vogue]

A fab, well-deserved profile of the one and only Maria Cornejo. [New York Times]

A fun profile on Hunter Schafer’s stylist, Dara Allen, who is doing a bang-up job. [Showstudio via Alexandra Hildreth’s Twitter]

Miu Miu is the brand of the year, Loewe is the logo of the year, and no-pants is the trend of the year, according to Lyst’s annual state-of-the-industry report. [Lyst]

What did you think of Pharrell’s second collection for Louis Vuitton? [Highsnobiety]

So funny… especially since the Alessandro-Fendi rumors have picked up again. [Style Not Com]

Gucci workers in Rome are on strike as the company moves more of its operations to Milano. [Reuters]

And finally… Gotta give credit to Willie Norris as the originator of the idea that the Bezos-Sánchez Vogue shoot was the purest form of camp.