The Marc Jacobs fashion brand, which is also controlled by the world's biggest luxury group LVMH, is one of the fastest growing labels within the French group's fashion and leather goods division.
Marc Jacobs also launched a cosmetics products line in August in the United States, with exclusive distribution handled by Sephora, LVMH's beauty products retail chain.
The move comes as Louis Vuitton's sales growth halved to around 5 percent in the past year and as the brand is trying to become more exclusive. It has hired accessories designer Darren Spaziani, ex-Proenza Schouler, to beef up its high-end offering of leather bags.
Nicolas Ghesquiere, a darling of fashion editors, who left Balenciaga last year after having successfully revamped the Kering fashion brand, is seen as a top contender to replace Jacobs.
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"It would be a positive sign if Ghesquiere joined Louis Vuitton as he is one of the most coveted designers today and he would give a creative jolt to the brand," said David Da Maia, analyst at brokerage Aurel BGC in Paris.
Marc Jacobs on Wednesday presented his last collection for Louis Vuitton, an all-black swan song that incorporated elements from his past shows such as the train station he famously reconstituted and the slow-turning white carousel carrying models, including Kate Moss, two years ago.