Key-Person Risk in Luxury | A Due Diligence Framework

Luxury goods investing requires systematic assessment of key-person risk—the vulnerability of enterprise value to individual leadership continuity. We propose a three-factor framework for evaluating this exposure: organizational depth (how many layers separate the principal from operations), brand codification (whether aesthetic and strategic identity exists independent of current leadership), and succession optionality (the pipeline of viable internal and external candidates). Applying this lens to watchmaking, fashion, and specialty retail reveals significant variance in risk profiles that current valuation multiples do not adequately price.

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