How LVMH’s Bernard Arnault became the world’s richest man

The boss of luxury goods giant LVMH has become just the third person in history to amass a $200 billion fortune.

Bernard Arnault, who earned the nickname “the wolf in cashmere” during his decades at the top, is now worth $201 billion, according to the Bloomberg Billionaires Index.

That makes the Frenchman just the third person – and first non-American – to reach the milestone, following Amazon’s Jeff Bezos in 2020 and Tesla’s Elon Musk in 2021.

But Arnault is worth significantly more than his American rivals – and is now the richest man in the world – as LVMH shares continue to soar as Amazon and Tesla collide.

The milestone marks an award for the 74-year-old, who has built LVMH into Europe’s most valuable company, worth £370bn, about the same value as the three largest companies on the London Stock Exchange – Shell, HSBC and Unilever – combined.

LVMH owns a range of high-end brands, including jewelers Tiffany and Bulgari, in addition to fashion labels Givenchy, Celine, Stella McCartney and Christian Dior, plus many others.

Shares and earnings have soared in the past year due to the strong growth in demand for luxury goods.

And analysts think there’s more to come. Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown, believes LVMH is “well insulated against economic shocks” thanks to its wealthy clients, who are less inclined to cut corners because of the rising cost of living.

Speaking in January, Arnault himself was in an optimistic mood, stating that if things “keep going like this, it will be an excellent year.”

Demand for designer handbags and watches is expected to soar after China scrapped its zero-Covid policy last year, with Chinese shoppers eager to shop for expensive goods.

Lund-Yates says LVMH has had a “rapid rise to where it is today,” thanks in large part to being a tightly run ship under Arnault. “There’s no getting around it,” she says, adding that the company is “on the cutting edge when it comes to creative power,” as evidenced by Dior and Celine’s well-received collections last fall.

Arnault has developed a reputation for ruthless decisions and keeping rivals guessing about the company’s future. Rumors are circulating about who one of Arnault’s five children will be anointed to take over the company.

All five play important roles, giving rise to a true succession-like legacy saga.

This year, Arnault’s only daughter, Delphine, who celebrated her 48th birthday this week, was appointed CEO of Christian Dior.

Until then, his eldest son Antoine was pinned as the frontrunner. The 45-year-old spoke highly of his siblings, saying they were “brought up with real values ​​about the importance of work and respect for the people.”

But Arnault senior has shown no signs of slowing down and LVMH recently raised the age limit for CEOs from 75 to 80.

His empire building began when, shortly after graduating from a prestigious Parisian university, he convinced his father’s construction company to take over a textile company.

He soon showed his ruthless streak, approving 9,000 layoffs after buying the company behind the Christian Dior brand in 1984.

LVMH itself was born in 1987, the love child of a merger between the fashion house Louis Vuitton and champagne maker Moet Hennessy. It now has some 70 brands in its portfolio and shares reached an all-time high of €851 on Tuesday – Delphine’s birthday – after rising by about a quarter this year and nearly 200 percent since the depths of the pandemic.

Luxury retail analyst Wizz Selvey praised LVMH for “giving brands an independent voice, tone and outlook under their umbrella.”

Forging different identities of brands from Louis Vuitton to Givenchy is “a real achievement” of Arnault’s leadership of the company, and a positive sign for future acquisitions, Selvey added.

Triumph for LVMH comes amid fears London’s stock market is being left behind by Paris.

Much to the chagrin of many in the City, Paris leapfrogged London last year to become the largest stock trading hub in Europe.

And while there are real fears of London losing its power, much of the changing of the guard is due to the success of LVMH, the Parisian luxury powerhouse built by Arnault.