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Louis Vuitton boss (LVMH), 70-year-old Bernard Arnault, has surpbaded Bill Gates to become the second richest person in the world, announced the Bloomberg Billionaires Index on Wednesday – and he's the only one in the world. did it brilliantly.
The French businessman, behind many big names in luxury, was pushed to second place after an exceptional year for LVMH, which saw its shares increase by 43%. Its net worth is now estimated at $ 107.6 billion, an increase of $ 39.1 billion in a single year.
This remains well below the $ 124 billion fortune of Amazon's founder, Jeff Bezos. However, the richest person in Europe, whose fortune is estimated at 3% of France's GDP, is one of the three members of the ultra-exclusive centibillionaire club.
But who is Bernard Arnault? And how did he make his fortune? More importantly, how does he spend all this money?
A fateful taxi
After studying engineering at the prestigious Ecole Polytechnique in Paris and graduating in 1971, Arnault joined the construction company of his family, Ferret-Savinel, as an engineer. Yet it was a chance meeting in New York that had a much more dramatic impact.
Sitting in a yellow cab, Arnault asked the driver what he knew of France. "He could not name the president, but he knew Dior," Arnault recently told the Financial Times.
From there, Arnault's course was set: three years later, and at the age of 30, he had reinvented Ferret-Savinel as a real estate company called Férinel and replaced his father at the presidency of the company. And in 1984, he embarked on an even more radical enterprise. After exerting pressure on the French government, he left Férinel and took the reins of the declining textile company Boussac – whose portfolio included Dior's house – and systematically turned the company into a launching pad for his luxury empire. The purchase price? One franc.
A luxury shopping spree
In 1987, Arnault was invited to act as mediator in the semantic merger of Möet Hennessy and Louis Vuitton, largely because LV held the Dior perfume rights and Henry Racamier, LV's 77-year-old president, considered him an ally, according to a report by New York Times.
Arnault had other plans, however, and instead sided with Moët Hennessy's president, Alain Chevalier, and bought 27% of LVMH in badociation with Guinness. This figure rose to 37% in 1988 and in 1989, Arnault was the largest shareholder. A year later, Racamier resigned from his family business and Arnault became president and CEO of LVMH.
It is part of the rapid expansion that led Arnault to embark on luxury, including Céline (1988), Berluti (1993), Guerlain (1994), Marc Jacobs (1997), Thomas Pink (1999), Fendi (2001) and DKNY (2001).
LVMH now comprises 75 "houses", including Dom Pérignon, Bulgari, Givenchy and TAG Heuer. Alongside the 23-storey LVMH tower located on 57th Street in New York City, the company owns the Cheval Blanc ski resort in Courchevel, the Cipriani hotel in Venice (site of George Clooney's wedding in 2016 ), Orient Express and luxury resorts in the Caribbean, Maldives. Saint-Tropez and Paris.
In 1999, Arnault also invested in a small but enterprising DVD rental company. His name? Netflix.
A bet pays
Arnault was one of the first foreign businessmen to take the gamble of investing in China at the beginning of Deng Xiaoping's market economy reforms, opening a Louis Vuitton store in Beijing in 1992.
The risk has been mbadively paid over the years. During the first quarter of this year, LVMH posted a 16% increase in sales to $ 14.10 billion, mainly thanks to Chinese buyers, who accounted for over one-third of sales in the Canadian automotive sector. luxury.
"With the Chinese, the company is really getting stronger," Jean-Jacques Guiony, chief financial officer, told reporters in April.
After Gucci
Like all business leaders, Arnault has suffered his share of failures over the years. His attempted takeover of Gucci in 1999 – described as "the most bloody fight in fashion" by the New York Post – has resulted in a dispute that Arnault eventually lost. To his chagrin, the fashion house fell into the arms of his great rival François Pinault for 2.92 billion dollars.
In 2014, Arnault also acknowledged his defeat after four years of buying the luxury scarf manufacturer Hermes, after Hermès CEO Patrick Thomas launched legal proceedings to prevent LVMH from taking a decision. control. Arnault finally agreed to give up his 23% stake in Hermes.
In addition, Arnault unsuccessfully challenged the dominance of luxury auction houses Christie's and Sotheby's by buying British auctioneers Phillips in 1999 and severely burned his fingers with online retailer Boo.com, which was sold off in April. 2000.
Go up to second place
In a statement released on April 10, detailing LVMH's first quarter operations, it was stated that "all geographic regions are experiencing good growth.
"This includes a 20% increase in fashion and leather goods sales, 13% in wine and spirits sales, and 12% sales of perfumes and cosmetics." In total, LMVH has grown 16% in the first quarter and organic products, up 11% from 2018. Its overall sales are approximately $ 14.3 billion.
These better than expected results led to a 27% increase in LVMH's shares since January 29, when the group announced record sales for 2018.
Arnault also does not rest on his laurels. On April 17, LVMH announced the completion of its $ 3.2 billion contract for Belmond, making it the owner or manager of 45 luxury hotels, restaurants, trains and river cruises.
Rihanna and Stella
On May 10, they then created the new Fenty clothing line, centered on Barbadian pop star Rihanna.
"Designing a line like this with LVMH is an incredibly special moment for us," Rihanna said in a statement. Arnault has given me a unique opportunity to develop a fashion house in the luxury sector, without artistic limits. I could not imagine a better partner both creative and professional. "
More recently, LVMH announced a partnership with the Stella McCartney sake brand, publicly owned by rival company Kering until last year. The pair did not reveal the terms of the deal, but said that it would allow McCartney to remain as creative director and majority owner of the brand.
"The opportunity to realize and accelerate the full potential of the brand alongside Mr. Arnault and the LVMH family, while holding the majority of the company's capital, has been an opportunity that allows me to He was thrilled, "McCartney said in a statement.
"This is the beginning of a great shared story, and we are confident of the long-term potential of his home," said Arnault, adding that McCartney's ethical principles were "a decisive factor."
As the world of fashion is increasingly criticized for its environmental footprint, the McCartney brand is clearly the one that Arnault and LVMH can rely on.
"She was the first to put sustainability and ethical issues early on in the spotlight and build her home around these issues," Arnault said of McCartney. "LVMH was the first major company in France to create a sustainability department more than 25 years ago, and Stella will help us increase our awareness of these important topics."
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