Carcelle, an energetic, self-made man who headed Louis Vuitton for more than two decades until 2012, died of cancer. He was 66 years old.
His death comes as LVMH is working hard to revive Louis Vuitton by moving it upmarket after sales growth plummeted in the past two years.
"A tireless traveller, Yves was a pioneer ... Always curious, passionate and in motion, he was one of the most inspiring leaders of men and women whom I have ever had the privilege of knowing," LVMH Chief Executive and founder Bernard Arnault said in a statement on Monday.
Louis Vuitton is the biggest profit and cash generator for LVMH, the world's No.1 luxury group which owns more than 60 brands including fashion labels Christian Dior, Celine and Fendi, jeweller Bulgari and cognac maker Hennessy.
Carcelle, a charismatic manager who inspired his teams to work as much as him, including on weekends, was regarded as the smooth implementer of Arnault's global ambitions for Louis Vuitton. "He led the industry into retail away from the wholesale model and played a key role in the development of the global luxury goods industry," said Julian Easthope, a luxury goods analyst at Barclays.
Louis Vuitton was an industry trailblazer, one of the first major luxury brands to only sell its goods in directly operated shops and never offer discounts.
During his tenure, Carcelle quadrupled Louis Vuitton's store network to just under 470, many of them in strategically important emerging markets such as China.
He grew the brand's revenue from an estimated 500 million euros ($657 million) in 1990 to more than 7 billion and oversaw its diversification into watches and jewellery, and into ready-to-wear under the stewardship of designer Marc Jacobs.
Learning on the job
Colleagues said Carcelle knew little about luxury when he became Louis Vuitton's strategy director in 1989 and, a year later, its chief executive. Yet, he quickly won Arnault's trust and became one of his most respected lieutenants.
"There was a lot of mutual respect between the two men even though they had very different personalities," an LVMH executive said of Arnault and Carcelle, declining to be named.
"Carcelle was very different from Arnault. Arnault is cold and not really somebody who easily gets excited about something, while Carcelle was very spontaneous and open."
Carcelle, a graduate from the prestigious Polytechnique engineering school and business school Insead, learned skills on the job, colleagues said, from exploiting links between art and luxury for marketing purposes to finding the right location for a store.
Before joining LVMH, he turned around French home textile brand Descamps and worked for fast-moving consumer brands such as Spontex sponges.
His departure in 2012 came as Louis Vuitton's sales growth was starting to slow down after years of double-digit increases, calling for a management change, particularly as Carcelle was in his early 60s.
Arnault appointed little-known Spanish Danone manager Jordi Constans as chief executive in 2011 and gave Carcelle a year to groom him. But in 2012, less than a month into the job, Constans resigned for health reasons and was replaced by LVMH veteran Michael Burke.
Last year, Arnault's daughter Delphine, ex-Dior deputy general manager, became Burke's deputy and influenced the choice of designer Nicolas Ghesquiere to replace Marc Jacobs at Louis Vuitton.
Over the years, Delphine Arnault has been increasingly positioning herself as LVMH's top talent-seeker, leading the group's investments in young brands such as shoemaker Nicholas Kirkwood and designer J.W. Anderson, and creating the LVMH fashion designer prize.
When Carcelle resigned in 2012, he remained a member of LVMH's executive board and became president of the Louis Vuitton foundation, a Frank Gehry-designed museum outside Paris that will house its art collection and is due to open next month.