Elon Musk did not last long at the top of the list of the richest people in the world. Just over a year after reaching the top, he was eclipsed by 73-year-old French billionaire Bernard Arnault, according to Forbes analysts. On December 20, they estimated that Arnault’s fortune is 180.2 billion dollars (about 169.8 billion euros), and thus exceeds that of Musk by 17 billion dollars.
Arnault is Co-Founder, Chairman and CEO of LVMH Moët Hennessy -Louis Vuitton, known simply as LVMH. His business group is the largest shareholder, with the majority of voting rights, in that publicly traded company. This is not the first time he has turned out to be the richest person in the world. He held that position for a short stint in 2019, 2020 and 2021. If Musk can make quick changes to Twitter, Arnault may not hold onto the title for long. Still, the Frenchman’s achievements are legendary.
A luxury empire
LVMH is a Paris-based conglomerate made up of 75 independent brands, primarily in beverages, high-end fashion and cosmetics. In 2021, it generated revenue of around 64.2 billion euros, 20% more than in 2019. Fashion and leather goods represented 48% of revenue.
The company, the world’s largest luxury goods firm, has more than 175,000 employees and 5,500 stores. In November 2022, its market value was around 371,000 million euros, according to Statista calculations, making it one of the most valuable companies in the world, ahead of Mastercard, Chevron and Nestlé.
Compared to others on the world’s richest list, Arnault is low-key and not well known outside of France. However, the company’s subsidiaries are anything but discreet, and include many traditional brands such as Bulgari, Dior, Fendi, Givenchy and, of course, Louis Vuitton. They also own the retailer Sephora and large department stores in Paris. The company’s oldest brand is the Chateau d’Yquem winery, founded in the late 16th century.
In the United States, Arnault became the center of attention when he bought the famous jewelry store Tiffany & Co., in 2019, for almost 16,000 million dollars. In Germany, it made headlines in early 2021, acquiring a majority stake in Birkenstock, though it remained unclear how the sandal maker could become a luxury brand.
Turning Louis Vuitton portfolios into millions
Arnault was born in the north of France, near the border with Belgium. After graduating as an engineer, he joined his father’s construction company. There he dedicated himself to real estate development and soon became its president.
In 1984 he took over bankrupt businesses that included brands like Christian Dior and Le Bon Marché, and it was his first foray into the luxury goods market. In 1987, LVMH was made up of the emerging Louis Vuitton and Moët Hennesy. Soon enough, Arnault sidelined others in a hostile takeover, and he was named chairman of the executive board in 1989, a position he has held ever since.
After becoming sole boss, he embarked on a decades-long multibillion-euro buying adventure, hollowing out one company after another. Many of the brands had been mismanaged and outdated, so he brought in modern management with young designers who changed things. “B.A.”, as he is called in his business world, was described as the “lord of logos” by fashion critic Suzy Menkes, in a profile published by the Herald Tribune in 1999.
“The goal is to be contemporary, modern, to create brands that speak a universal language,” Menkes wrote, “and Arnault insists that maintaining the individuality and uniqueness of each brand is the primary concern within an organized corporate structure.” That strategy allowed each brand to retain a degree of independence while becoming more professional.
The company has focused on expansion, especially through growth in Asia, its largest market, followed by the US and Europe. Its glamorous advertising is based on the aspirations of shoppers, offering lower-cost items such as belts, hats, and more, all with a logo that gets younger customers hooked on the brand.
Just as important, Arnault always believed in the power of the internet. Everything moved online, and so did LVMH, without losing its aura of exclusivity. Now, many of the brands have their own opulent online stores, and are no longer afraid to openly publish their prices.
Today, LVMH is a family affair. Arnault’s five children work with him in different areas. Always impeccably dressed, Bernard Arnault gives almost no access to his private life. What we know about him is that he loves to play tennis and that he enjoys collecting art and music. For a few years he owned an auction house, Phillips de Pury.
In 2014, the Louis Vuitton Foundation was inaugurated in Paris, a museum built by the LVMH group to promote culture. It was designed by the famous architect Frank Gehry and houses the Arnault collection. It is supposed that one day it will be delivered to the city.
He has also donated millions to charities and to the restoration of Notre Dame Cathedral. The big question now is how everything will continue. Which of his sons will take over the company? Is one of them predestined to be his successor, or will the group split between them? And is the company still on the lookout for other brands, such as Chanel, Armani or Hermes? But Arnault is not alone. His tactic of bringing together luxury family-run businesses has inspired others, like Richemont and Kering, to do the same. They may be competitors, but it was Arnault who created the luxury roadmap.
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.