How Moët Hennessy’s pricey gamble backfired
Moët Hennessy, the powerhouse behind iconic labels such as Dom Pérignon and Hennessy, is feeling the burn of its once-unshakeable position in the luxury sector.
As the wine and spirits division of LVMH, it had long been one of the group’s most lucrative units, but recent decisions have left it floundering.
From aggressive price hikes to a misfiring acquisition spree and a costly direct-to-consumer retail push, the company’s fortunes have taken a sharp turn.
Under the leadership of former CEO Philippe Schaus, Moët Hennessy embarked on a strategy of aggressive price increases, hoping to protect profit margins. But as luxury goods sales falter in the post-pandemic market, this strategy has begun to backfire.
Despite pushing through double-digit price increases in 2021 and 2022, the company’s sales have stagnated, now falling below pre-pandemic levels.
Retailers have balked at the high price points, and consumers, feeling the squeeze of global economic uncertainty, are reluctant to purchase at elevated prices.
Insiders report that some managers within Moët Hennessy were already raising alarms that these pricing strategies were unsustainable, but the company pressed ahead with its course, resulting in reduced sales volumes.
Moët Hennessy’s pursuit of diversification through acquisitions further compounded the brand’s issues.
The €2 billion splurge, which included stakes in Jay-Z’s Armand de Brignac champagne and the Provencal rosé brand Minuty, was aimed at reducing the company’s reliance on its traditional staples—cognac and champagne.
But these deals have proven to be more of a burden than a boon. With Moët Hennessy’s core business still being its main revenue driver, the additional brands have only served to introduce operational complexity and erode profit margins.
The latest leadership under CEO Jean-Jacques Guiony has acknowledged that many of the acquisitions will need to be scaled back, and their growth potential reevaluated.
Alexandre Arnault, who has a personal stake in the business as the son of LVMH’s founder, has taken direct responsibility for the acquired brands and is reworking plans to optimize their potential.
As if the price hikes and acquisitions weren’t enough, Moët Hennessy’s direct-to-consumer (DTC) retail strategy has also fallen flat. The company ventured into online and physical retail stores, including an outlet for Veuve Clicquot in Paris and a Hennessy store in China, hoping to capitalize on premium consumers seeking direct access to their products.
But this has turned into a costly misstep. Reports indicate that these ventures are losing millions and are now being reevaluated as part of a broader strategy reset. A joint e-commerce venture with Campari launched in 2021 has similarly failed to meet growth expectations.
The decision to pursue DTC during a time when the luxury market was shifting and still recovering from the pandemic has proved ill-timed.
Now, the company is rethinking its entire retail approach, with plans to scale back and refocus on its core business channels.
Moët Hennessy’s leadership overhaul came in the wake of these disappointing results. In February 2025, Jean-Jacques Guiony, the former CFO of LVMH, was brought in as CEO, replacing Schaus, who had been at the helm since 2015.
Guiony’s first order of business was to take a hard look at the company’s portfolio and its acquisitions. Along with Alexandre Arnault, who has been appointed deputy CEO, the duo is tasked with steering the ship back on course.
Guiony has already signaled that some of Moët Hennessy’s recent acquisitions will need to be significantly scaled back, and the company’s DTC retail business will undergo a complete overhaul.
Alexandre Arnault has assumed responsibility for the private sales business, hoping to address what he calls an “ambitious strategy” that, in hindsight, was “difficult to accommodate today.”
Despite the missteps of the past few years, Moët Hennessy remains a valuable asset for LVMH. But as the company faces a steep climb back to profitability, it will need to reassess its approach to pricing, acquisitions, and consumer engagement.
The once-untouchable luxury giant is now grappling with the same forces that have reshaped the broader industry—disruptive economic pressures, shifting consumer preferences, and the relentless need for innovation.
The new leadership’s focus will be on refocusing Moët Hennessy’s strategy, reducing unnecessary complexity, and streamlining operations.
While the company’s future remains uncertain, its ability to adapt to an evolving market will be critical to whether it can maintain its status as the crown jewel of LVMH’s vast portfolio.
In the coming months, expect a more conservative, strategically sound Moët Hennessy, one that must walk a fine line between growth and sustainability in a vastly different market landscape than the one it thrived in just a few years ago.