Bernard Arnault, the CEO of LVMH, lost $11.2 billion in a single day after the shares of his luxury goods conglomerate fell 5% in Paris, the largest decline in over a year, according to Bloomberg. Despite the setback, Arnault remains the richest person in the world, with a net worth of $192 billion. His net worth decreased from $203 billion on Monday, $21 billion more than Tesla founder, Elon Musk’s net worth of $182 billion on the same day. In the past year, Arnault’s net worth rose by $29.5 billion.
LVMH, which controls 75 luxury brands, including Louis Vuitton, Christian Dior, and Tiffany & Co, lost approximately $30 billion as a result of the share downturn. The European luxury sector was also affected, with the shares of Gucci owner, Kering SA, decreasing by over 2% and those of Hermes International slumping by 5.5%.
Despite the share loss, Arnault’s lead on Musk has only slightly narrowed. Arnault began his career at his father’s real estate company in 1971, where he convinced his father to sell the company’s construction sector and focus on property. He then invested $15 million to buy Boussac Saint-Frères, the parent company of fashion brand Christian Dior, in 1984. Arnault streamlined the business by firing 9,000 workers, except those employed by Dior. In 1987, he formed LVMH with Alain Chevalier, then CEO of Moët Hennessy, and Henry Racamier, then president of Louis Vuitton. Today, LVMH is the largest company in Europe by market capitalisation.
According to Forbes’ real-time billionaire tracker, Arnault, who was already ahead of Amazon founder Jeff Bezos, has surpassed him to become the wealthiest person in the world. Arnault’s net worth is currently valued at $193.6 billion, an increase of $111 billion over the past 15 months. This increase is due to the recovery of LVMH brands since the start of the COVID-19 pandemic and the merger with US luxury jeweller Tiffany & Co.
Arnault’s rise to the top has been credited to a surge in demand for luxury goods in China, where LVMH has a significant presence, as well as a booming US stock market. Although Arnault has overtaken Musk to become the second-richest person in the world, Musk’s fortune is $11.4 billion lower. LVMH’s share price rally had been sustained for a long period, but a recent downturn saw a reversal. However, the share price is still 23% higher than it was at the start of the year, and the MSCI Europe Textiles Apparel & Luxury Goods Index has risen over 27%, showing the strength of the luxury sector.
As attendees at a Paris conference hosted by Morgan Stanley expressed caution about the potential subdued performance of the US luxury market, Deutsche Bank analysts noted that investors are expected to become more discerning when choosing European luxury stocks due to worries about slowing growth in the US. Despite the loss, LVMH remains one of the most lucrative companies globally, with a significant impact on the world’s luxury market.
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