Delphine is currently vice-president at Louis Vuitton, a role she has held for 13 years. Her new appointment will take effect from 1 February.
Her promotion is part of a management reshuffle at Europe’s most valuable luxury company, with the 47-year-old taking over as the fashion house’s chief executive from Pietro Beccari.
“Under Delphine’s leadership, the desirability of Louis Vuitton products advanced significantly, enabling the brand to regularly set new sales records,” Arnault announced Delphine’s new role at LVMH, as quoted by The Guardian.
“Her keen insights and incomparable experience will be decisive assets in driving the ongoing development of Christian Dior,” the 73-year-old added.
Meanwhile, Beccari will replace outgoing Louis Vuitton CEO Michael Burke, who will report directly to Arnault in a new, as-yet undisclosed role at LVMH.
“Both are well respected; logical promotions within the group,” Credit Suisse analyst Natasha Brilliant told Reuters.
Arnault’s decision to elevate Delphine to Dior CEO is the being seen as the latest in a series of moves to ensure control over LVMH remains within the family when he steps down.
Some analysts have predicted this new appointment could spark a succession battle between Delphine and her younger brother Antoine, after Arnault appointed the 45-year-old to run LVMH’s holding company last month.
Analyst at investment firm Bernstein, Luca Solca told The Guardian Arnault was creating a “Darwinian contest” to succeed him – prompting comparison to the Murdoch heirs or the fictitious Roy family at the centre of the hit TV show Succession.
In addition to Delphine and Antoine, from Arnault’s first marriage to Anna Dewavrin, the billionaire entrepreneur also shares three children with his second wife, Hélène Mercier.
All three of them have been given responsibilities within Arnault’s empire, comprising brands such as Fendi, Stella McCartney, Marc Jacobs, Sephora and Bulgari.
Alexandre Arnault, 30, is responsible for products and communications at Tiffany’s. Frédéric, 28, is a chief executive at luxury watch makerTAG Heuer.
Arnault’s youngest son Jean, 24, heads marketing and product development at Louis Vuitton’s watches division.