Bernard Arnault, CEO of LVMH, is the third richest man in the world. He is at the head of a fortune of $159 million, according to the Bloomberg Billionaires Index. Focus on an essential icon of the world of luxury, on his career, his fortune, but also his failures.
While the global economy was hit hard by the economic crisis, Bernard Arnault broke all records during the pandemic. Its success is mainly due to the luxury industry which has not suffered from the consequences of the crisis, unlike traditional sectors.
The luxury sector is indeed doing very well, even in times of crisis. His performances were very satisfactory and surprised many. This is a sector that is becoming more and more established around the world and more particularly in emerging countries. In 20 years, sales of luxury goods have tripled to reach $281 billion, according to a study by Bain & Company. The market capitalization of French luxury giants (Kering, L’Oréal, Hermès) jumped by almost 40% between the end of 2019 and today.
The biography of Bernard Arnault
Bernard Arnault was born in Roubaix on March 5, 1949. After studying at the Lycée de Roubaix and the Lycée Faidherbe in Lille, he joined the Polytechnic School. Once he graduated, he began a career as an engineer within the Ferret-Savinel company. He holds numerous strategic positions within the company. Indeed, in 1974, he was appointed construction director, then general director three years later. In 1978, he became CEO of the group. He has also been at the head of numerous prestigious companies, such as Financière Agache SA and Christian Dior SA.
In 1989, he became the main shareholder of LVMH (Louis Vuitton – Moët Hennessy) and headed the world’s leading luxury group. In January of the same year, he was appointed president of the LVMH group and still holds this position today. In addition to being at the head of a pioneering group in the world of luxury, he stood out for his investments in the media with the sale of the economic newspaper “La Tribune” to buy the “Les Echos” group.
In 2011, his fortune amounted to 22 billion euros. He was then the fourth richest person in the world. He frequented high-ranking politicians, particularly right-wing leaders. He was in fact very close to Nicolas Sarkozy who, on May 6, 2007, invited him to the Fouquet’s evening during his election to the presidency of the Republic.
Bernard Arnault is the father of five children: Delphine (1975) and Antoine (1977) born from his union with Anne Dewavrin, and Alexandre, Frédéric and Jean, with his second wife, Hélène Mercier.
Agache SE, the holding company owned by Bernard Arnault
Bernard Arnault is the head of Financière Agache, a holding company controlled by the company Agache SE. The group carries out most of its activity in the luxury sector through its holdings in Christian Dior and LVMH. He also holds a diversified financial investment portfolio.
Agache SE, formerly Groupe Arnault SE, is controlled by the “Arnault family group”, and formerly by the holding company “Belholding”, of the Belgian financier Albert Frère.
The group holds stakes in various companies:
- Carrefour Group : in September 2021, the group announced the sale of its stake, i.e. approximately 5.7% of the capital of the mass distribution group.
- Hermes, through LVMH.
- Many companies across L Capital and L Capital Asia.
- Paprec : a French company for the collection and recycling of industrial and household waste, founded in 1994.
- Europ@weba Paris-based venture capital firm offering business incubation services to startups.
Agache SE would also own 100% of Thomas Pink (British clothing brand), Les Échos, Investir, Le Journal des Finances, Radio Classique, SID éditions, Connaissance des arts and many others.
In July 1999the holding company is investing $30 million in the streaming platform, Netflix. The service was still in its infancy, but had already completed three initial fundraising rounds.
Bernard Arnault: has the successful man experienced failures?
Over the years, LVMH began to develop its portfolio of prestigious brands. Today it has 75, including 25 centuries-old houses. We then wonder if such a charismatic leader experienced failures or moments of doubt during his career. The answer is obviously yes. They were certainly rare, but still very difficult to manage. We can take the example of its major competitor, François Pinault, CEO of the Kering group, when he took control of Gucci in 1999, although he held 34% of the capital.
We can also take the example of the day when Bernard Arnault tried, in vain, to get his hands on Hermès, by entering its capital in disguise. This action cost him a fine of 8 million euros, imposed by the Financial Markets Authority (AMF). However, it will allow him to pocket a capital gain of 2.4 billion euros following the sale of the shares he had acquired.
How do people define and perceive Bernard Arnault?
Being the third richest person in the world and at the head of a luxury giant can attract the thunder of a large number of people. As Patrick Poivre d’Arvor wrote so well, in the JDD, in 1989: “the nicer ones call him Conquistador, the naughtier ones call him Terminator. It is undoubtedly at this price that one becomes a manager today. Only the future will tell if the good financier is also a good industrialist.”
Arnaud Cadart, portfolio manager at Flornoy & Associés, explains in turn: “He has an incredible competitive spirit, remarkable intelligence, and also a lack of empathy in business which is the mark of great builders. But he is not a Howard Hughes, he is not isolated and has always surrounded himself with the best”. He continues: “He is truly inhabited by what he does, which explains his success. He has not given up for 40 years, he wants to be the strongest in all professions, and he is also an ultra-modern manager who has introduced engineering methods into luxury.”
The fortune of Bernard Arnault
In June 2021, Bernard Arnault regained his second place as the richest man in the world thanks to a fortune which amounted to 173 billion dollars. He is the only French member of the top 10 of the Bloomberg ranking.
The CEO of LVMH had previously occupied this place in July 2019. However, he fell to 6th place in the summer of 2020. Forbes had also confirmed this 2nd position about a month ago. Today, Bernard Arnault is the main shareholder of LVMH. He holds 47.5% of the group’s shares.
As of July 2019, his fortune was estimated at $108 billion. This was the first time that he was positioned in second place in the ranking of the richest people on the planet. At that time, Jeff Bezos was at the head of a fortune of 125 billion dollars.
Bernard Arnault also became, for just a few hours, at the end of May 2021, the richest person in the world, thanks to a net fortune estimated at $186.3 billion. This propelled him to first position, at the same time dethroning Jeff Bezos, whose fortune was $186 billion.
At the start of 2022, the charismatic CEO is the head of a fortune of $162 billion. Bernard Arnault, however, remains far behind Elon Musk ($220 million). The fortune of iconic e-commerce figure Jeff Bezos is estimated at $169 million.
