Editor’s Note
This article examines the shifting fortunes at the pinnacle of global wealth, detailing how Bernard Arnault’s steady rise in luxury goods eclipsed Elon Musk’s tech-driven fortune following market turbulence.
The recent ascent of Bernard Arnault to become the world’s richest person coincides with the rapid evaporation of a large portion of Elon Musk’s wealth, following the controversial Tesla and SpaceX CEO’s takeover of Twitter in October 2022.
Elon Musk did not last long at the head of the list of the world’s richest people. Just over a year after reaching the top, he was eclipsed by the 73-year-old French billionaire, Bernard Arnault. Forbes sets his net worth at US$191 billion, while Bloomberg offers a more conservative estimate of US$172 billion. His fortune surpasses that of Musk by more than $17 billion.
Born in Roubaix, northern France, in 1949, Arnault graduated from the prestigious École Polytechnique, an engineering school in Paris. Arnault is married and has five children, all of whom currently work at LVMH or one of its brands, according to Bloomberg.
The son of a construction magnate, Arnault took over his father’s company in the 1970s and eventually focused on the real estate sector before moving into textiles and retail.
He began his career at the family construction company Ferret-Savinel, where he became president in 1978 after successive promotions.
Six years later (1985), he learned that the French government was seeking a new investor to take over Boussac Saint-Freres, where he invested $15 million from his family business.
The bankrupt textile group held a key asset: Christian Dior, a celebrated French fashion house. That was the beginning of the construction of LVMH. He still holds a 97.5% stake in the iconic French luxury fashion house.
Arnault bought control of the group, returned it to profitability, and embarked on a strategy to develop the world’s leading luxury goods company.
Arnault acquired a majority stake in LVMH in 1989, two years after the group was formed through the merger of Louis Vuitton and Moët Hennessy. He has been the company’s chairman and CEO ever since.
His business group is the largest shareholder, holding the majority of voting rights in the publicly traded company. This is not the first time he has been the world’s richest person. He held that position for a short period in 2019, 2020, and 2021. If Musk manages to make quick changes at Twitter, Arnault may not hold the title for long. Still, the Frenchman’s achievements are legendary.
LVMH is a conglomerate headquartered in Paris. Over the past three decades, Arnault has turned LVMH into a luxury goods powerhouse with 75 brands selling wine, spirits, high-end fashion, leather goods, perfumes, cosmetics, watches, jewelry, luxury travel, and hotel stays. He opened the first Louis Vuitton store in China in Beijing in 1992.
In the United States, Arnault came into the spotlight when in January 2021 he completed the acquisition of the famous jeweler Tiffany & Co. for nearly $16 billion, the largest acquisition ever in the luxury industry.
In Germany, he made headlines in early 2021 by acquiring a majority stake in Birkenstock, although it was unclear how the sandal maker could become a luxury brand.
In 2021, it generated revenue of about €64.2 billion, 20% more than in 2019. Fashion and leather goods accounted for 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 billion, according to Statista estimates, making it one of the world’s most valuable companies, ahead of Mastercard, Chevron, and Nestlé.
Compared to others on the world’s richest list, Arnault is discreet and not very well-known outside 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 major department stores in Paris. The company’s oldest brand is the Chateau d’Yquem winery, founded in the late 16th century.
The company has focused on expansion, especially through growth in Asia, its largest market, followed by the U.S. and Europe. For some years, it owned an auction house, Phillips de Pury.
Amid global market turmoil, Arnault’s wealth has remained quite stable in recent months. The vast majority of Arnault’s wealth is tied to LVMH shares, and since 2020, the company’s share price has grown by almost 65% overall.