Celine
Luxury house that doubled revenue to €2.5B through costly creative signaling, now testing whether it can maintain position with operational efficiency.
Between 2018 and 2024, Hedi Slimane transformed Celine from €1 billion in annual revenue to €2.5 billion, vaulting it past Fendi to become LVMH's third-largest fashion house behind Louis Vuitton and Dior. Then in October 2024, Slimane departed and LVMH appointed Michael Rider, who had worked under Phoebe Philo during Celine's previous era. The succession reveals how costly signals can generate growth until the signal itself becomes the constraint.
Slimane's tenure operated on costly signaling principles: flagship store designs that cost 40% more than LVMH averages, fashion shows in Los Angeles rather than Paris (adding $3-5 million in logistics per show), and an aesthetic so singular that merchandising teams couldn't adjust collections for regional preferences. This works identically to peacock tails—the signal succeeds precisely because competitors cannot afford to copy it. Celine's revenue doubled because the costliness guaranteed authenticity. Customers paid premiums for products that signaled access to Slimane's vision, not just leather goods.
But costly signals face inherent limits. By 2024, Barclays analysts identified "brand fatigue" and underperformance in China—the market generating 30% of luxury revenues. When signals become too familiar, they stop functioning as signals. Peacock tails deter rivals and attract mates only until every peacock grows equivalent plumage. Celine's aesthetic saturated its addressable market: customers who valued Slimane's rock-chic minimalism had already bought in, while customers seeking other luxury expressions bought elsewhere.
Michael Rider's appointment in October 2024 represents a phase transition: from costly signaling to operational efficiency. Rider spent a decade executing Philo's vision profitably, demonstrating he can maintain creative coherence while accommodating merchandising needs. LVMH is betting that Celine's trajectory resembles a 2008-2018 Tier 3 to Tier 2 promotion, not a peak followed by regression. The biology suggests caution: species that evolve costly ornaments rarely shed them without catastrophic selection pressure, because the signal commitments have restructured the entire organism around display rather than survival.