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Yquem Replaces Longtime Head With Managing Director of Cheval-Blanc

The Lur Saluces family's control of the famed Sauternes estate comes to an end as the majority owners appoint Pierre Lurton.

Per-Henrik Mansson
Posted: May 17, 2004

At a board meeting in Bordeaux today, Château d'Yquem retired its 69-year-old president, Count Alexandre de Lur Saluces, and replaced him with Pierre Lurton, who will also stay on as managing director of Château Cheval-Blanc, Wine Spectator has learned. Lurton will take the title of CEO and managing director of Yquem.

The decision marks the end of the Lur Saluces dynasty's 219-year control at the illustrious Sauternes estate, whose 252 acres produce the world's most famous sweet white wine from botrytized grapes. The changes allow the majority owners, multibillionaire Bernard Arnault and the luxury-goods conglomerate Moët Hennessy Louis Vuitton (LVMH), to take charge of Yquem.

Today's meeting closes 13 years of turmoil at Yquem that started in 1991 and climaxed in 1996 when a long simmering feud between Alexandre and his family led his brother, Eugène de Lur Saluces, and other relatives to sell 55 percent of Yquem's shares to LVMH for $101 million.

For three years, Alexandre used his position to stop LVMH from gaining control of the business. He felt betrayed that his family had sold a stake in the historic estate, which the Lur Saluces had come into in 1785 through a marriage to a member of the Yquem family. (Eugène and other de Lur Saluces family members retained 35.8 percent of Yquem.) In 1999, Arnault negotiated a truce with Alexandre and bought his and his son Bertrand's shares. That deal increased LVMH's stake in Yquem to 64.2 percent, but Alexandre continued to run Yquem as if he owned it.

Under Yquem's old bylaws, the president had to retire at age 75, but last year, the LVMH-controlled board lowered the compulsory retirement age to 70, said an Yquem shareholder who asked not to be identified. Alexandre, who has run Yquem since 1968, turns 70 on May 20. He could not be reached for comment.

With Lurton, 47, LVMH ushers in a dynamic winemaker and manager from an old Bordeaux family. Lurton is known for his savvy reading of market trends, respect for terroir and experience with the New and Old worlds.

Arnault, who is chairman of LVMH and bought Cheval-Blanc with Albert Frère in 1998, said Lurton would open Yquem to "modernity" while also respecting its traditions. "I have full confidence in Pierre Lurton," said Arnault. "He possesses the necessary qualities to continue the Yquem legend." Lurton was appointed after Frère agreed to share him with Yquem.

Lurton becomes the only Bordelais to head two châteaus out of the region's top nine estates: the five first-growths (Haut-Brion, Lafite Rothschild, Latour, Margaux and Mouton-Rothschild); St.-Emilion's two premiers grands crus classés A (Cheval-Blanc and Ausone); Sauternes' only premier cru supérieur (Yquem), and the best of Pomerol (Pétrus).

Lurton is also president of Cheval des Andes, a joint venture in Argentina between Cheval-Blanc and LVMH's Bodegas Terrazas de los Andes. A father of six, he also consults for a South African winery, Morgenster, and owns Marjosse, an estate in Entre-Deux-Mers.

"I am a bit nervous," said Lurton of the challenge of heading another top growth in Bordeaux. "But it's exciting, it's an adventure. In my wildest career plans, I would never have seen myself as president of both Yquem and Cheval-Blanc."

Lurton's career seemed destined to break the mold from the beginning. He comes from a well-known Bordeaux family that owns two dozen châteaus in several appellations and about 3,000 acres of vineyards. At age 23, he was appointed to head one of the family's jewels, Clos Fourtet, a St.-Emilion premier grand cru classé B. In 1991, at age 34, he was appointed director of Cheval-Blanc by its former owner, the Fourcaud-Laussac family.

Lurton gained Arnault's respect with his management of Cheval-Blanc. "He demonstrated exceptional talent at the head of Cheval-Blanc, and magnified its terroir and wines," Arnault said.

This spring, Cheval-Blanc released its 2002 futures almost a year behind schedule but priced them at 105 euros -- nearly 75 percent more than the first growths' 2002s futures when they were released last year. "With our elitist policy, we brought Cheval-Blanc to a good level compared to the other Bordelais," Lurton said.

Cheval-Blanc's higher prices also fit with LVMH's stable of luxury goods, be it in fashion (Christian Dior, Kenzo, Fendi), cosmetics (Guerlain, Givenchy), watches (TAG Heuer, Chaumet), shoes (Berluti), spirits (Hennessy Cognac), Champagne (Dom Pérignon, Veuve Cliquot, Krug) or Louis Vuitton leather products. LVMH is a world leader in luxury goods, with annual sales of 12 billion euros and 56,000 employees worldwide.

But Yquem has performed below its potential in recent years, according to board members, Bordeaux négociants and other sources.

"Yquem is the most mythical of all wineries in the world," Lurton said. "But it's a sleeping beauty; it doesn't make you dream like it used to."

Yquem's sales and profits are also down, said an Yquem shareholder who asked to remain anonymous. "I don't think a financier like Mr. Arnault can be satisfied much longer with a business that doesn't function. He didn't invest more than $100 million to have bad results," the source added.

Part of Yquem's problem has been a commercial policy that is out of touch with contemporary market realities, LVMH and other sources said. Under Lur Saluces, the wine was sold about five years after the harvest. While Yquem will sell its 1999 vintage later this year, most Sauternes estates recently came out with futures offerings for the potentially outstanding 2003 vintage, which is selling briskly amid global enthusiasm.

Yquem's policy may have been fine when there was a year-round, permanent market for Sauternes, said Pierre Godé, an attorney who is Arnault's right-hand man and sits on the Yquem board. "But you must adapt. You can't do otherwise," he said. "It's a global market, and virtually all Bordeaux sales occur in a two-month period. And to be absent during those two months means you don't meet your buyers. Then they are unhappy when we do sell Yquem, and sales go poorly."

To rectify the situation, LVMH has decided to bring out Yquem futures starting with 2003. The price hasn't been announced yet, but Godé said, "with Pierre, we know we will have access to négociants."

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Read more about Bernard Arnault, LVMH and the battle over Yquem:

  • June 30, 2000
    The Conqueror

  • June 30, 2000
    A Golden Web of Luxury

  • April 21, 1999
    Battle Over Chateau d'Yquem Ends With LVMH as New Owner

  • Dec. 31, 1998
    The Two Tycoons Behind The Cheval-Blanc Deal
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