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How Bernard Arnault, CEO of LVMH, became the world’s richest person

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Fashion & Watches

How Bernard Arnault, CEO of LVMH, became the world’s richest person

We trace the extraordinary career journey of the French tycoon behind the luxury-goods powerhouse.

February 28, 2023
Mr Bernard Arnault surpassed Twitter owner Elon Musk on the Bloomberg Billionaires Index on Tuesday.

Photo: AFP

The world’s richest person does not tweet.

Mr Bernard Arnault, the French tycoon behind luxury-goods powerhouse LVMH, surpassed Twitter owner Elon Musk on the Bloomberg Billionaires Index on Tuesday, marking the first time he has topped the list of the wealthiest people.

Never before has anyone from France – or Europe as a whole – laid claim to having the largest fortune on the planet.

The 73-year-old has long been a mainstay in wealth rankings but, unlike Mr Musk and other brash billionaires, makes only rare public appearances and is not personally active on social media.

Though LVMH Moet Hennessy Louis Vuitton oozes extravagance, with 75 labels ranging from Dom Perignon to Christian Dior to Tiffany & Co, he has sought a low profile in a country where bling-bling displays of wealth are frowned upon.

Mr Arnault, worth an estimated US$170.8 billion (S$230 billion), has used European craftsmanship to turn LVMH into the world’s biggest luxury-goods conglomerate.

Related: South Koreans are the world’s biggest spenders on luxury goods

https://www.thepeakmagazine.com.sg/gallery/fashion-watches/how-bernard-arnault-ceo-of-the-lvmh-became-the-worlds-richest-person/
How Bernard Arnault, CEO of LVMH, became the world’s richest person
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It is a training ground for ambitious designers seeking to make a name for themselves: Marc Jacobs and the late Virgil Abloh at Louis Vuitton, Raf Simons at Christian Dior, Phoebe Philo at Celine. They all infused the heritage brands with novelty that kept them relevant to young consumers.

While weakening markets have also taken a bite out of Mr Arnault’s wealth this year – his fortune is down about US$7.2 billion in 2022 – he has fared better than the tech billionaires who dominate the world’s rich list. That is because demand has remained resilient for high-end products as the Covid-19 crisis ebbed.

Paris-based LVMH generated about €64 billion (S$91.8 billion) in sales last year, a sharp rebound from the depths of the pandemic in 2020. Mr Arnault and his family own about 48 per cent of the shares in the company, with 64 per cent of the voting rights, according to its annual report.

A representative for Mr Arnault did not immediately respond to a request for comment.

Gem spotted

Born in Roubaix in the north of France in 1949, Mr Arnault graduated from the elite engineering school Ecole Polytechnique. He went on to work at the family business Ferret Savinel, which focused on industrial construction, before moving in 1981 to the United States, where he ventured into property development.

He returned to France and made his foray into luxury goods in 1984, when he took over Boussac Saint-Freres, the bankrupt textile group that owned a gem: Christian Dior.

He spun off most of the company’s other businesses and in 1989 used the windfall to buy a controlling stake in LVMH, whose two main companies, Louis Vuitton and Moet Hennessy, merged in 1987.

Over the next three decades, he turned LVMH into a luxury behemoth selling champagne, wine, spirits, fashion, leather goods, watches, jewellery, hotel stays, perfume and cosmetics through more than 5,500 stores worldwide. He was quick to grasp that China would become a key market, opening the first Louis Vuitton store in Beijing in 1992.

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A post shared by LVMH (@lvmh)

Billionaire battles
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LVMH, with a €365.7 billion market value that is the biggest in Europe, earlier this year lifted the age limit of its chief executive. That would allow Mr Arnault to stay at the helm until 80, a sign he intends to be in charge for longer.

In his quest to stay under the radar, Mr Arnault said in October that LVMH sold its private jet. Twitter accounts follow the planes of billionaires in an attempt to shame them about carbon emissions, and the subject became a hot topic in France, with some politicians proposing to ban or tax private jets.

“With all these stories, the group had a plane and we sold it,” Mr Arnault said on Radio Classique, which is owned by LVMH.

“The result now is that no one can see where I go because I rent planes when I use private planes.”

Though built on mostly successful acquisitions, LVMH and Mr Arnault have had famous losses, too.

He was bested by Mr Francois Pinault, one of France’s richest people, in buying Gucci, which is now part of Kering.

He also failed in a hostile takeover attempt of Hermes International, the Birkin bag maker owned by the country’s richest family. A member of the Hermes clan called him “a wolf in cashmere” for the predatory ways he attempted to take over their company.

Mr Arnault is building a dynasty of his own within LVMH. He has five children from two marriages, all of whom currently work at the firm or one of its brands. His second child, Antoine, 45, just got an expanded role at holding company Christian Dior SE.

Mr Arnault, who is known to keep a strict diet and play tennis regularly, is also an art collector and led the opening in 2014 of the Fondation Louis Vuitton, a monumental private art musuem, in Paris’ Bois de Boulogne. The venue is a monumental private art museum designed by architect Frank Gehry, meant to house LVMH’s corporate collection as well as Mr Arnault’s.

Bloomberg’s wealth index estimates the vast majority of Mr Arnault’s fortune stems from his 97.5 per cent stake in Christian Dior, which, in turn, controls about 41 per cent of LVMH. The family holds an additional LVMH stake of roughly 6 per cent.

Mr Arnault has an estimated US$10.3 billion in cash and other assets, based on an analysis that includes dividends, taxes and charitable contributions.

He is the fifth person ever to rank No. 1 on Bloomberg’s wealth index since it debuted in 2012. The others are Mexican tycoon Carlos Slim, Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos and Mr Musk.

This article was first published in The Straits Times.

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MCI (P) 064/11/2022. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2023 SPH Media Limited. All rights reserved.