How did Bernard Arnault become the richest man in the world?

LVMH Group owns some of the world’s best-known luxury brands, including fashion houses Dior, Givenchy, Christian Lacroix, Céline, Fendi and Marc Jacobs – and of course, Louis Vuitton, which in 2018 became the world’s first $10 billion luxury The brand has grown and has seen revenue double in the last four years. (Louis Vuitton’s menswear designer, Grammy Award-winning musician Pharrell Williams, will present his first couture collection in Paris in June.)

Arnault built a luxury powerhouse in 2020 with serial purchases including US jeweler Tiffany for $15.8 billion – one of his most successful acquisitions. The portfolio has more than 75 brands, including watchmaker TAG Heuer, jewelry line Bulgari, and beverage brands Dom Pérignon (Champagne), Hennessy (Cognac), and Glenmorangie (Whisky).

The group also owns several hotels including the historic Paris department store Le Bon Marché, the famous Hotel Cipriani in Venice and the Michelin-starred restaurant Cheval Blanc in Courchevel in the French Alps.

Another prized possession is La Samaritaine, a heritage department-store chain that began as a small clothing store in 1870. Sustained financial losses and security issues at the original store’s building, located across from the Louvre in Paris (which often hosts LV fashion shows), forced its closure in 2005. Arnault bought and redeveloped it, restoring its Art-Nouveau façade and cast iron. signs, and a Cheval Blanc hotel, 96 low-cost housing units, and office space were added to the site.

Arnault and his family – his five children work at LVMH and there is speculation about who will be his successor – own 48% of the company’s shares. His personal fortune is estimated at just under $200 billion, and includes properties around the world, a private island in the Bahamas, and an art collection that includes an early 20th-century depiction of Charing Cross Bridge by Claude Monet, and works by Jean Does- Michel Basquiat, Damien Hirst, Maurizio Cattelan, Andy Warhol and Pablo Picasso.

His wealth exceeded Bezos’ for the first time on December 16, 2019, though for all but five hours, when LVMH’s stock rose in response to the Tiffany deal.

Comparisons are often made between Arnault’s acquisition of Tiffany and Musk’s purchase of Twitter. Both paid more, but Arnault’s purchase proved to be a saver. After failing to acquire Gucci and Hermès, he turned his attention to Tiffany. LVMH made an unsolicited offer in 2019 for $120 per share and closed the deal at $135 per share, or $16.2 billion, a 37% premium to the share price plus interest, taxes, depreciation and amortization (Ebitda). It was almost 17 times the luxury jeweler’s earnings before . ,

In early 2020, the COVID-19 pandemic gave Arnault second thoughts. He backtracked, which led to lawsuits in Delaware. The renegotiated deal closed a few months later, with LMVH agreeing to pay $15.8 billion, a face-saving cut of $420 million on the original offer price.

But luxury-goods sales boomed during the pandemic, and acquisitions proved a hit. Tiffany turned in higher revenues and profits and its cash flow also increased.

The pandemic lockdown, it was initially feared, would hurt luxury sales in the US and China, the biggest markets for luxury goods. But consumer appetites proved malleable and brands’ allure irresistible, and LMVH posted record profits in both 2022 and 2023.

In France, the affluent exercise influence and power through ownership of the media. LVMH also owns the daily newspaper Le Parisien, a classical radio station and France’s largest business newspaper, Les Echos, which it bought from Pearson, the former owner of the Financial Times, in 2007.

Arnault is from the French city of Roubaix, near the Belgian border, where he was born in 1949. He graduated in 1971 from France’s most prestigious engineering school, which includes three Nobel laureates and former Renault chairman and CEO Carlos Ghosn. Its alumni. His father owned a civil engineering company and later ran a real estate business which Arnault took over after his death.

Dior perfume attracted his mother, he once told an interviewer. He gave her piano lessons, and is said to have played the Canadian concert pianist Hélène Mercier, his second wife, the French composer Chopin’s etudes during their courtship.

The luxury magnate also remains in controversies from time to time. Placards featuring Arnault’s face appeared amid calls for higher taxes on France’s billionaires in recent protests against President Emmanuel Macron’s unpopular plan to raise the retirement age as a way of tackling losses in France’s state-run pension system. Have gone

He attracted ire for trying – unsuccessfully – to acquire Belgian nationality after France’s 2012 budget appeared set to impose heavy taxes on the wealthy. Earlier, he had moved his family and business to America in 1981 in response to the tax-the-rich agenda of French socialists. He returned to France in 1983 to take over the prestigious but bankrupt Boussac, which included a number of new businesses. Of these, he has retained only a few, including Dyer.

This was also when he began picking up shares in LVMH, the merged company of the Moët Hennessy and Louis Vuitton brands, soon becoming its largest shareholder. He quickly acquired a reputation for ruthlessness – and ‘The Wolf in Kashmir’ – for taking out top LMVH officials in subsequent fights.