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Matteo De Rosa is sitting in his office in the LVMH headquarters on 22 Avenue Montaigne in Paris. A few miles away, a new showroom is being readied for the division he oversees: LVMH Métiers d’Art, the holding company for the group’s key material suppliers. The space, which is set to open to the public in June, is an investment, which — on the heels of a website launch — signals the division’s growing importance within the group. It is, as De Rosa puts it, LVMH’s “insurance policy”.
The global luxury industry is facing a materials crisis: the resources it continues to mine are growing more scarce and rising in cost. Created in 2015 and presided over by LVMH chief strategy officer Jean-Baptiste Voisin, LVMH Métiers d’Art has been snapping up supply chain companies with increasing regularity, allowing it to secure high-quality calf and lambskin leather, exotic skins such as crocodile, and fine metal hardware. It continues to eye new acquisitions. “In a world of scarcity, our job is to secure access to the best materials,” says De Rosa.
Around 45 per cent of its revenue — which totalled an approximate €700 million in 2023 — is generated via LVMH houses, but it also works with other luxury brands, the names of which it does not disclose. Challenges include finding its place in the LVMH ecosystem, where houses are famously independent. There is also the question of sustainability and ethical sourcing. Suppliers everywhere are facing questions about whether and how they are reducing the impacts of their material sourcing processes, helping to protect the environments that these materials come from, and bringing in further new-gen options.
Métiers d’Art has ambitions to cover the entire value chain, as a way of improving transparency and traceability, says De Rosa, who joined as CEO in September 2021 from Dries Van Noten, where he was president. To that end, it owns a network of farms in Africa, Australia and the US. Traceability is of increasing importance, particularly in light of the tsunami of regulation coming out of the European Union; compliance will hinge on knowing the full extent of a product’s supply chain.
De Rosa knows a thing or two about luxury materials. His CV includes stints at Chinese-Canadian luxury brand Ports 1961, which places emphasis on craftsmanship (it has an atelier in Milan and works closely with Italian mills). After that, he was fashion and lifestyle director for the Australian fine jewellery and luxury watches retailer Kennedy, before relocating to Belgium to take on the role at Dries Van Noten; a house that uses fabric as the starting point for its designs. In his early career, De Rosa also co-founded his own leather goods brand, Sartie.
Métiers d’Art’s focus until now has been on materials for accessories. In December, it acquired M.on.de (Metal-on-Demand), an Italian manufacturer of small hardware parts for accessories, in which it already owned a minority stake. This followed the acquisition of Grupo Verdeveleno in September, a Spanish tannery specialised in the processing and finishing of exotic leather, including python and lizard; as well as a majority stake in Italian tannery Nuti Ivo, which has expertise in vegetable and traditional tanning. “Verdeveleno controls its entire supply chain, from farming to tanning, with great attention to traceability and sustainability,” says De Rosa. “Nuti Ivo is also extremely advanced [in these areas].”
What is it targeting next? “We want to build the full traceability for all the fibres: cotton, silk, linen, wool,” De Rosa says. A first step in that direction was sealing commercial partnerships last year with Hosoo, a Japanese silk manufacturer established in 1688 in Kyoto, and Kuroki, a Japanese manufacturer specialised in denim dyeing and weaving.
Métiers d’Art has an office in Japan, and owns companies across the world. This global view is important, says De Rosa. “We are dependent on materials, and materials are really in many regions of the world. If you want the best cashmere, you go to Mongolia, if you want the best vicuña, you go to the border of Argentina. If you want alligators, you go to Louisiana,” he explains. LVMH remains committed to making in France and Italy, he adds. “There is a difference between the job that we do and manufacturing. For manufacturing and assembling, Italy and France are among the best countries because they have a tradition, together with Japan.”
Securing supply for the long term
Ensuring a consistent supply of fine-quality raw materials has long been on the minds of luxury’s biggest players. “The main challenge that we have is scarcity because of the changing climate and the tension in the market,” says De Rosa.
Both LVMH and rival Kering have been acquiring key strategic suppliers with increasing frequency. Kering, for example, took a majority stake in France Coco, one of the most renowned tanneries of crocodilian skins, in 2013. It also owns Caravel Pelli Pregiate, an Italian tannery that specialises in exotic skins. Similarly, Hermès has acquired several of its suppliers, including D’Annonay tannery and Tanneries du Puy.
Vertical integration has accelerated in recent years after pandemic disruptions were followed by inflation, squeezing suppliers and hitting production, especially in Italy. Against this backdrop, some luxury brands have begun to combine forces to acquire suppliers — recognising that the need for high-quality materials may ultimately outweigh any competitive risk.
Many suppliers don’t have the funding to innovate and grow, and are struggling to recruit talent, says De Rosa, so it is important for luxury companies to invest in supporting their long-term survival. Integrating decades-old founder-run suppliers can be tricky, however. Métiers d’Art will either take a minority or majority stake in the business or form a commercial partnership, depending on the circumstances. “Usually companies come to us for three reasons: a) they don’t have a next generation, b) they have financial problems, c) they want to grow and they don’t know how. Depending on these three factors, we decide what is the best way to partner,” says De Rosa.
The ageing of the workforce is an ongoing concern. “Our industry requires a lot of talent and this is one of the main challenges of the future, because our products are not made by technology so much; the technology is there to help the hands of the artisan,” says De Rosa. “A company like Métiers d’Art allows us to attract the younger generation and empower them.” How? “We guarantee long-term commitment, we offer better working conditions, we innovate through technology improvements and also through creativity boosts with projects like the artistic residency, where an artist works with the artisans in one of our métiers for six months to create something beautiful and to go beyond the day-by-day production,” he explains. Métiers d’Art also has a talent-mobility programme. “We move people from Italy to Singapore, from Singapore to Japan, from Italy to Spain,” De Rosa notes.
Considering new-gen materials
There is, of course, also the question of ethical and sustainable sourcing. LVMH is among the luxury companies that have come under fire from animal rights organisation Peta over its use of exotic skins, which are becoming increasingly controversial, akin to fur (in April 2023, Peta protested against LVMH brands’ use of exotic skins outside the group’s annual shareholder meeting). Attitudes towards exotics are changing: Chanel and Burberry have already put a stop to using such materials. In March, Copenhagen Fashion Week announced that it is banning exotic skins and feathers from its runways next year.
Cow leather — seen by some as more acceptable than exotics, given it is more readily produced as a by-product of the meat industry — is also in Peta’s cross hairs: it crashed the runways of several luxury brands during the Spring/Summer 2023 season (none LVMH-owned) and Victoria Beckham’s AW24 show, to call out their use of leather. Here, the industry has been less prepared to follow Peta’s lead. “Roaming animals play an important role in regenerative agriculture, so the way we look at opportunities is more about how leather is sourced and processed, and under what conditions [or] type of system the animals are raised,” says Karla Mora, founder and managing partner of Alante Capital, an investor in sustainable innovations. “There are aspects of animal-based leather that still outperform alternatives, including durability and the quality — both of which have impacts on sustainability in the use phase.”
LVMH Métiers d’Art stands by its use of all animal leathers, including exotics, but says it takes the ethics of farming animals for this purpose very seriously. “We do not comment on what the clients of our maisons decide to buy. What we guarantee is a sustainable, traceable and ethical process of production and full attention to what we call ‘one welfare’ — a balance between environment, animals and people throughout the entire chain of value,” says De Rosa.
Experts say this is likely to become a more pressing issue in future as consumers become increasingly aware of the issues at play. “Companies like LVMH have an obligation to their shareholders to stay on top of consumer sentiment to ensure they remain relevant and profitable,” says Nicole Rawling, CEO of non-profit Material Innovation Initiative.
Métiers d’Art is partnering with biomaterials startup Mycoworks, among others, in order to source vegetable-based materials, says De Rosa. “We invest a lot in research to improve the current processes of production of ‘traditional’ materials. At the same time, we partner with several startups to help them in their research of complementary, alternative materials.” He declined to disclose what percentage of its materials are made from new-gen offerings, or further details.
For now, the primary focus is on preserving the know-how and the craftsmanship of suppliers across Europe and the rest of the world. De Rosa points, for example, to its Japanese denim supplier Kuroki, one of the last companies still dyeing fibres with natural indigo and persimmon fruit. “Securing transmission of this knowledge for the future is one of our missions.”
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