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Bernard Arnault becomes the richest person in the world, According to Forbes but for a brief period of time

Bernard Arnault

Bernard Arnault (owner of Louis Vuitton Moet Hennessy, LVMH), has replaced Jeff Bezos (Founder of Amazon) to become the world’s richest for a brief period of time on Monday. However, Bezos reclaimed the spot later. According to Forbes, Arnault’s net worth has been estimated to be almost $186.2 billion. The luxury fashion owner, chairman and chief executive of LVMH’s fortune was increased by $110 billion in the one-and-a-half year, taking his overall net worth to $161.2 billion. Earlier this month, he overtook Tesla’s celebrity chief executive Elon Musk to become the world’s second-richest person, as per the Bloomberg Billionaires Index.

Louis Vuitton Moet Hennessy has always been the world’s leading fashion luxury goods company, reporting a 32% yearly surge in revenue making it to 14 billion euros during the first quarter of 2021. In the early months of this year, LVMH acquired America’s largest jewellery maker Tiffany & Co. for $15.8 million, making it the most expensive deal in the luxury fashion business in history. The reason behind this deal was to boost LVMH’s smallest business that includes the jewellery and watch division, already home to Bulgari and Tag Heuer. Plus it will help in expanding its fastest-growing industry segments while also strengthening its US presence.

Fashionable Cloths

Arnault’s fortune comes from the pandemic-defying revenue by luxury group LVMH (Louis Vuitton Moet Hennessy) that also owns names like Fendi, Christian Dior and Givenchy. Arnault’s fortune jumped from $76 billion in March 2020 to $186.3 billion, a rise of over $110 billion in merely 14 months. LVMH rose 0.4 per cent during the initial trading hours on Monday, taking its market cap to $320 billion and pushing Arnault’s fortune by more than $600 million.

Last year, many notable brands were changing the pricing strategy to compensate for the losses incurred due to the pandemic plus taking advantage of the current situation at the same time. It was stated that luxury brands are increasing their prices of products during the pandemic. This may sound wrong and unjustified but this might be quite profitable. Chanel increased the prices of their leather bags by 17% in April (mostly in China, as out of total revenue on luxury goods, 35% comes from China). A regular Chanel monogrammed bag usually priced at 1320$ were later being sold at 1500$ i.e 14% increase in less than a year. Followed by Louis Vuitton strategizing their pricing twice in a single year, with a 3% increase in March and 5% in May. Once the lockdown was lifted, people were splurging on clothes and luxury items. It has been noted in China, people were in long queues outside stores just to satisfy their hunger to shop. French fashion house Hermes reportedly saw 2.7$ million sales in a single day when it reopened in April last year. British Vogue noted that people have been spending around 450$ on nonessential items like pyjamas just to feel less anxious and free. 

LVMH also owns numerous high fashion, luxury brands like Fendi, Christian Dior and Givenchy that surged 0.4% during the early hours of trading on Monday this week, putting Arnault’s personal stake up by more than $600 million against his companies’ market cap at $320 billion. During Lockdown, LVMH and Arnault had risen to more heights in terms of success while several major world companies were struggling to sustain. According to Jefferies analyst Flavio Cereda, LVMH recorded revenue of $17 billion in the first quarter of 2021, which is 32% more of what compared to the same period in 2020.

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