Bernard Arnault: the new richest man in the world

Elon Musk didn’t last long as the richest person in the world. Just over a year after reaching the top, he was overshadowed by French billionaire Bernard Arnault, 73, according to analysts at forbes. On Dec. 20, they estimated Arnault’s fortune at $180.2 billion (€169.8 billion), nearly $17 billion more than Musk’s.

Arnault is co-founder, chairman and CEO of LVMH Moet Hennessy Louis Vuitton, commonly referred to as LVMH. Its holding company is its largest shareholder and has the majority of voting rights in the publicly traded company.

This isn’t her first time as the richest person in the world. He briefly held the role in 2019, 2020, and again in 2021. If Musk can turn Twitter around quickly, Arnault may not hold the title for long. Still, the Frenchman’s achievements are legendary.

an empire of luxury

LVMH is a Paris-based conglomerate comprising 75 separate brands, primarily in beverages, high-end fashion and cosmetics. In 2021, it generated revenue of €64.2 (US$68.2 billion) billion, 20% more than in 2019. Fashion and leather goods accounted for 48% of revenue.

The company – the largest luxury company in the world – has more than 175,000 employees and 5,500 stores. As of November 2022, its market value was around €371 billion, according to calculations by Statista, making it one of the most valuable companies in the world — ahead of Mastercard, Chevron and Nestlé.

Compared with others on the world’s richest list, Arnault is low-key and little known outside France. However, the company’s subsidiaries are anything but lowkey and include many traditional brands like Bulgari, Dior, Fendi, Givenchy and of course Louis Vuitton. They also own retailer Sephora and department stores in Paris. The company’s oldest brand is the winemaker Chateau d’Yquem, founded at the end of the 16th century.

In America, Arnault gained attention when he bought the famous jewelry house Tiffany & Co. in 2019, nearly $16 billion. In Germany, he made headlines in early 2021 when he bought a controlling stake in Birkenstock, although it’s unclear how the sandal maker can transform into a luxury brand.

Turning Louis Vuitton handbags into billions

Arnault was born in northern France, close to the Belgian border. After graduating from engineering school, he joined his father’s construction company. There he focused on real estate development and soon became its president.

In 1984, he took over a failing business that included Christian Dior and Le Bon Marche department store. It was his foray into the luxury market. In 1987, LVMH was formed by the merger of Louis Vuitton and Moet Hennessy. He soon ousted the others in a hostile takeover and was named chairman of the executive board of directors in 1989—a post he has held ever since.

After becoming sole boss, he spent decades buying up several billion euros, vacuuming up one company after another. Many of the brands were poorly managed and outdated, so he brought in modern management and hired young designers to shake things up.

Reportedly called “BA” within the company, Arnault was described as the “Lord of Logos” by fashion critic Suzy Menkes in a 1999 International Herald Tribune profile. She also put her finger on the key to his success then and now.

“The goal is to be contemporary, modern, to make brands speak a universal language,” she wrote. “And Arnault insists that maintaining each brand’s individuality and uniqueness is of paramount concern, within a streamlined corporate structure.” This strategy allowed each brand to maintain a certain degree of independence and become more professional.

The company has focused on expansion, primarily through growth in Asia, its biggest market, followed by the US and Europe. Its glossy publicity is awe-inspiring. They offer cheaper items like belts, hats and anything else with a logo to entice younger shoppers and hook them.

Equally important, Arnault believed in the power of the internet. Everything was moving online – and so was LVMH, without losing its exclusive aura. Now many of the brands have opulent websites and online stores and are no longer afraid to openly display prices.

planning the future

Today, LVMH is a family affair. All five of Arnault’s children work with him in different capacities. Always impeccably dressed, Arnault has gray hair and is very private. Colleagues rarely talk about him. We know that he is an avid tennis player and enjoys music and art collecting. For a few years he owned the Phillips de Pury auction house.

In 2014, the Louis Vuitton Foundation opened in Paris. The Frank Gehry-designed contemporary art museum houses Arnault’s collection and is due to be handed over to the city one day. He also donated millions to charities and the restoration of Notre Dame Cathedral.

The big question now is: what’s next? Which of the sons will take over the company? Are any of them predestined to be his successor, or will it be split between them? And the company is still lurking? Chanel, Armani, Hermes and several other brands are still around. But Arnault is not alone. His tactic of bringing together family-run luxury companies has inspired other companies, such as Richemont and Kering, to do the same. They may be competitors, but Arnault has created the luxury roadmap.

Edited by: Ashutosh Pandey