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Bernard Arnault becomes world’s second-richest man

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how did he make his billions?

 

Louis Vuitton (LVMH) boss Bernard Arnault, 70, overtook Bill Gates to become the second richest person in the world, the Bloomberg Billionaires Index announced Wednesday—and he did it in style.

The French businessman, who is the force behind many of the biggest names in luxury, pushed to the second spot after a stellar year for LVMH, which saw company shares rise 43%. His net worth is now estimated at $107.6 billion—an increase of $39.1 billion in a single year.

This remains way short of Amazon founder Jeff Bezos’ $124 billion fortune. Yet Europe’s richest person—whose fortune is estimated to be equivalent to 3% of France’s GDP—is one of only three members in the ultra-exclusive centibillionaire’s club.

But just who is Bernard Arnault? And how did he make his fortune? More importantly, how does he manage to spend all that cash?

A fateful taxi ride

After studying engineering at the prestigious Ecole Polytechnique in Paris and graduating in 1971, Arnault joined his family’s construction company, Ferret-Savinel, as an engineer. Yet it was a chance meeting in New York that proved to have a far 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: within three years—and by the age of 30—he’d reinvented Ferret-Savinel as a real estate firm called Férinel, and replaced his father as company president. And in 1984, he embarked on an even more drastic venture. After lobbying the French government, he left Férinel and took up the reins of faltering textile company, Boussac—whose portfolio included the house of Dior—and systematically turned the company into the launchpad for his luxury empire. The purchase price? One Franc.

A luxury shopping spree

In 1987, Arnault was asked to mediate in the rancorous merger of Möet Hennessy and Louis Vuitton, largely because LV held the rights to Dior perfume and Henry Racamier, the 77-year-old chairman of LV, saw him as an ally, according to a report from the New York Times.

Arnault had other plans, however, and instead sided with Moet Hennessy boss, Alain Chevalier, and bought 27% of LVMH in combination with Guinness. This grew to 37% in 1988 and by 1989 Arnault was the biggest shareholder. A year later Racamier resigned from his own family firm and Arnault become both chairman and CEO of LVMH.

It was part of a rapid expansion that saw Arnault snap up luxury firms including Céline (1988), Berluti (1993), Guerlain (1994), Marc Jacobs (1997), Thomas Pink (1999), Fendi (2001), and DKNY (2001).

LVMH itself now comprises 75 ‘houses,’ including Dom Pérignon, Bulgari, Givenchy, and TAG Heuer. Alongside the 23-story LVMH Tower on New York’s 57th Street, the company owns the Cheval Blanc ski resort in Courchevel, the Hotel Cipriani in Venice (site of George Clooney’s 2016 wedding), the Orient Express, and luxury resorts in the Caribbean, Maldives, St. Tropez, and Paris.

In 1999, Arnault also invested in a small but enterprising DVD rental firm. It’s name? Netflix.

A bet pays off

Arnault was one of the first overseas businessmen to take the gamble of investing in China at the start of Deng Xiaoping’s market-economy reforms, opening a Louis Vuitton store in Beijing in 1992.

The risk has massively paid off over the years. In the first quarter of this year, for instance, LVMH reported a revenue increase of 16% to $14.10 billion, largely fueled by Chinese buyers, who account for over a third of the luxury sector’s sales.

“With the Chinese, the business is really moving from strength to strength,” Financial Director Jean-Jacques Guiony told reporters in April.

Going after Gucci

Like all business leaders, Arnault has suffered his fair share of failures along the way. Most notably, his 1999 attempt to takeover Gucci—described as “the bloodiest fight in fashion” by the New York Post—which resulted in litigation that Arnault ultimately lost. To his chagrin, the fashion house fell into the arms of arch-rival François Pinault for $2.92 billion.

In 2014, Arnault also admitted defeat in a four-year attempt to purchase luxury scarf-maker Hermès, after then-Hermès Chief Executive Patrick Thomas launched court proceedings to prevent LVMH from mounting a takeover. Arnault eventually agreed to relinquish his 23% stake in Hermès as a result.

Elsewhere, Arnault has unsuccessfully challenged the dominance of luxury auction houses Christie’s and Sotheby’s by buying British auctioneers Phillips in 1999 and got his fingers badly burnt with online retailer Boo.com, which went into liquidation in 2000.

Rising to second place

An April 10 release detailing first-quarter trading for LVMH, stated that, “All geographic regions are experiencing good growth.

“This includes a 20% increase in sales of fashion & leather goods, a 13 % rise in sales of wines & spirits and a 12 % increase in sales of perfumes & cosmetics. Overall, LMVH showed first-quarter growth of 16% and organic growth of 11% compared to 2018. Its overall revenue was around $14.3 billion.

These better-than-expected results have led to a 27% rise in LVMH shares since January 29, when the group announced record sales for 2018.

Arnault is not resting on his laurels, either. On April 17, LVMH announced the completion of its $3.2 billion deal for Belmond, making them part-owners or managers of 45 luxury hotel, restaurant, train, and river cruise properties.

Rihanna and Stella

On May 10, they followed this up with the creation of the new Fenty fashion line, centered around Barbadian pop star Rihanna.

“Designing a line like this with LVMH is an incredibly special moment for us,” Rihanna said in a release. “Mr. Arnault has given me a unique opportunity to develop a fashion house in the luxury sector, with no artistic limits. I couldn’t imagine a better partner both creatively and business-wise.”

More recently, LVMH announced a partnership with Stella McCartney’s name sake brand, which was publicly owned by rival company Kering until last year. The pair did not disclose the terms of the deal, but said it will allow McCartney to continue as creative director and majority owner of the brand.

“The chance to realize and accelerate the full potential of the brand alongside Mr. Arnault and as part of the LVMH family, while still holding the majority ownership in the business, was an opportunity that hugely excited me,” McCartney said in a release.

“It is the beginning of a beautiful story together, and we are convinced of the great long-term potential of her House,” said Arnault, before stressing that McCartney’s ethical principles were “a decisive factor”.

With the fashion world increasingly drawing criticism for its environmenal footprint, McCartney’s brand is clearly one that Arnault and LVMH can draw from.

“She was the first to put sustainability and ethical issues on the front stage, very early on, and built her House around these issues,” Arnault added about McCartney. “LVMH was the first large company in France to create a sustainability department, more than 25 years ago, and Stella will help us further increase awareness on these important topics.”

 

 

Source : Fortune

 

 

 

 

 

 

 

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Ford Trims Workforce: 4,000 Jobs to Go in Europe

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(FILES) The logo of carmaker Ford is pictured on the sidelines of a warning strike called by metalworkers’ union IG Metall at the plant of carmaker Ford in Cologne, western Germany, on October 29, 2024. – US car manufacturer Ford on November 20, 2024 announced plans for 4,000 further job cuts in Europe, mostly in in the UK and Germany, in the latest blow to the continent’s beleaguered car industry. (Photo by INA FASSBENDER / AFP)

US car giant Ford on Wednesday announced 4,000 more job cuts in Europe, mostly in Germany and Britain, in the latest blow to the continent’s beleaguered car industry.

“The company has incurred significant losses in recent years,” Ford said in a statement, blaming “the industry shift to electrified vehicles and new competition”.

The move will affect 2,900 jobs in Germany, 800 in the UK and 300 in western Europe by the end of 2027, a Ford spokesman told AFP.

“It is critical to take difficult but decisive action to ensure Ford’s future competitiveness in Europe,” said Dave Johnston, Ford’s European vice-president in the statement.

The company also said it was adjusting the production of its Explorer and Capri models, resulting in reduced hours at its Cologne plant in the first quarter of 2025.

Europe’s car industry has been plunged into crisis by high manufacturing costs, a stuttering switch to electric vehicles and increased competition in key market China.

 

Germany’s Volkswagen has been among those hardest hit, announcing in September that it was considering the unprecedented move of closing some factories in Germany.

 

“The European automotive industry is in a very demanding and serious situation,” Volkswagen CEO Oliver Blume said at the time.

 

Ford had already announced in February 2023 that it was planning to cut 3,800 jobs in Europe, including 2,300 in Germany and 1,300 in Britain.

The company said then it was planning to reduce the number of models developed for Europe, concentrate on the profitable van segment and speed up the transition to electric vehicles.

Ford currently has around 28,000 employees in Europe with 15,000 in Germany, according to the company’s works council.

 

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Tinubu Dissolves UNIZIK Council, Sacks VC, Registrar, Otukpo Pro-Chancellor

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President Bola Tinubu has approved the dissolution of the Governing Council of Nnamdi Azikiwe University (UNIZIK), Awka, Anambra State, and the removal of the institution’s Vice-Chancellor, Prof. Bernard Ifeanyi Odoh, and Registrar, Mrs. Rosemary Ifoema Nwokike.

The council, chaired by Ambassador Greg Ozumba Mbadiwe, comprised five other members: Hafiz Oladejo, Augustine Onyedebelu, Engr. Amioleran Osahon, and Rtd. Gen. Funsho Oyeneyin.

A statement released on Wednesday by presidential spokesperson, Bayo Onanuga, revealed that the council was dissolved following reports of procedural violations in appointing the vice-chancellor.

According to the statement, the council had allegedly appointed an unqualified candidate, disregarding due process, which triggered tensions between the university’s Senate and the council.

The Federal Government expressed dismay over the council’s actions, emphasizing the need for adherence to the university’s governing laws in decision-making.

“The council’s disregard for established rules necessitated the government’s intervention to restore order to the 33-year-old institution,” the statement noted.

In a related development, President Tinubu also approved the dismissal of Engr. Ohieku Muhammed Salami, the Pro-Chancellor and Chairman of the Governing Council of the Federal University of Health Sciences, Otukpo, Benue State.

Salami was accused of suspending the university’s Vice-Chancellor without following the prescribed procedures, a move the Federal Ministry of Education had previously directed him to reverse.

Despite the Ministry’s directives, Salami reportedly refused to comply and resorted to issuing threats and abusive remarks towards the Ministry’s officials, including the Permanent Secretary.

The Federal Government reiterated that the primary role of university councils is to ensure the smooth operation of academic activities, strictly adhering to the laws establishing each institution.

Tinubu warned university councils against engaging in actions that could destabilize their institutions, as his administration remains committed to enhancing the nation’s education system.

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Ekiti Workers to Earn N70,000 Minimum Wage as Govt Signs MoU with Unions

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The Ekiti State Government has reached an agreement with labour leaders in the state, signing a Memorandum of Understanding (MoU) for the payment of the N70,000 minimum wage approved by the Federal Government.

Addressing journalists at a brief ceremony in Ado-Ekiti on Tuesday, the Head of Service (HoS), Dr. Folakemi Olomojobi, announced that the payment would commence immediately.

She lauded Governor Biodun Oyebanji for prioritizing the welfare of workers despite the state’s limited resources.

“This development demonstrates the governor’s commitment to improving the livelihood of our workers,” Dr. Olomojobi stated, highlighting the proactive measures taken by the administration to ensure prompt implementation.

In their remarks, the Trade Union Congress (TUC) Chairman, Comrade Sola Adigun, and the Nigeria Labour Congress (NLC) Chairman, Comrade Olatunde Kolapo, expressed their appreciation to Governor Oyebanji for fulfilling his promises to workers.

They confirmed that the new minimum wage would apply to all cadres, including employees in ministries, parastatals, agencies, and pensioners.

The Chairman of the Joint Negotiating Committee (JNC), Comrade Femi Ajoloko, described the implementation as a fair and commendable adjustment.

“This decision reflects the governor’s magnanimity and his dedication to fostering a productive workforce in Ekiti State,” he said.

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