Luxury Goods Tycoon Arnault Now World’s No. 2 Richest, Closing In On Bezos
Luxury conglomerate LVMH’s stock has been red hot since the beginning of October, propelling its CEO, Bernard Arnault, into the No. 2 spot on Forbes’ list of the world’s richest people. His $107 billion fortune edges out that of Microsoft cofounder Bill Gates, whose net worth is $106.9 billion. Arnault is only $5.2 billion behind Amazon’s Jeff Bezos, the richest person on earth, worth $112.3 billion as of 5:20 p.m. ET, forbes.com reports.
Arnault, Europe’s richest person, was briefly number two behind Bezos in July before slipping back to the world’s third richest. Arnault, Bezos and Gates are the world’s only centibillionaires, according to Forbes’ real time billionaire rankings. Arnault’s net worth reached $100 billion in June.
It’s been a great year for the luxury goods titan. Back in March when Forbes published our annual list of the world’s richest, Arnault ranked No. 4, with a $76 billion fortune, behind Bezos, Gates and Berkshire Hathaway chairman and CEO Warren Buffett. Since then, the stock of Paris-based LVMH, whose holdings include Sephora and Givenchy and dozens of other brands, has skyrocketed by over a third. In late October, the stock jumped following news that LVMH was exploring the purchase of U.S. jewelry fixture Tiffany.
Such an acquisition is in line with the strategy that’s made Arnault so rich: Acquire legacy luxe brands, then give them a bigger, more modern global footprint.
“Why are brands like Louis Vuitton and Dior so successful?” Arnault, 70, asked in an interview as part of Forbes’ latest cover story. “They have these two aspects, which may be contradictory: They are timeless, [and] they are at the utmost level of modernity. . . . It’s like fire and water.”
And while LVMH’s market cap of approximately $240 billion pales in comparison to Microsoft’s $1.1 trillion, the ambitious Frenchman has the success of large tech companies in his sights. “If you compare us to Microsoft, it’s small,” he told Forbes. “We have to work, we have to have ideas… It's just the beginning.”
Arnault did not start LVMH, in which his family now has a 47% stake, from scratch, but he did build it into the behemoth it is. In 1984, he acquired the parent company of Christian Dior’s apparel branch. He then wanted to buy Christian Dior’s perfume segment, which LVMH had previously purchased. Amid a management feud at the conglomerate, the head of “LV” (Louis Vuitton) teamed up with Arnault to help oust the head of “MH” (Moët Hennessy). Arnault then turned around and booted Louis Vuitton’s chief. By 1990, Arnault had control of the whole company.
LVMH’s 79 brands span fashion, cosmetics, jewelry and fine wine and spirits. The conglomerate has made 20 acquisitions since 2008, including London-based hospitality brand Belmond, which owns the luxury train line Eastern & Oriental Express.
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