… 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
Just In: Makinde appoints Ogunwuyi DG investments, public-private partnership agency
The Executive Assistant to the Oyo State Governor on Investment Promotion, Honourable Segun Ogunwuyi, has been appointed as the pioneer Director-General of the newly-established Oyo State Investments and Public-Private Partnership Agency.
A statement signed by the Special Assistant (Print Media) to Governor Seyi Makinde, Moses Alao, indicated that Hon. Ogunwuyi’s appointment was approved by Governor Seyi Makinde, on Tuesday.
The appointment is to take immediate effect.
In a letter conveying the appointment, the Governor congratulated Hon. Ogunwuyi, wishing him success in his new task.
Hon. Ogunwuyi, represented Ogbomoso North/Ogbomoso South in the 8th House of Representatives. Prior to that role, he was elected into the Oyo State House of Assembly in 2011.
Hon. Ogunwuyi holds a B.Sc. in Accounting and a Master’s in Business Administration (MBA) from the Obafemi Awolowo University, Ile-Ife.
He is a Certified Accountant and Financial consultant, who has consulted for top organizations like TNT Logistics (UK), Baker Hughes (UK), Nokia Siemens Network (Finland) and NNPC (Nigeria), among others.
Iwo Road interchange project will be delivered under one year – Makinde
The government of Oyo State is set to collaborate with the Federal Road Safety Corps (FRSC) on the management of traffic within the State, the Oyo State Governor, Engineer Seyi Makinde has said.
The Governor expressed the commitment of his administration to collaborate with the agency on how to manage traffic gridlock on the roads and proffer solution for easy vehicular movements in the State.
A statement signed by the Chief Press Secretary to the Governor, Mr. Taiwo Adisa, quoted the Governor as saying these while receiving the Corps Marshal and Chief Executive of the FRSC, Dr. Boboye Oyeyemi, who paid him a courtesy visit in his Office.
Makinde maintained that the state government under his leadership will continue to support the activities of the FRSC in the State.
“Let us keep the cordial relationship going. We need a lot of support to lift the situation in our State- ideas and things that you have been able to provide solutions to at the federal level. We also want to key into them so that we do not make the same mistake all over again. I believe this is going to be the beginning of our working together,” Governor Makinde said.
The Governor said his administration is committed to finding lasting solutions to the gridlock at the Iwo Road Interchange, which has been causing a lot of problems for the users of the road in that area, noting that the project would be executed within nine months.
He said: “Also, at Iwo Road, it’s the same thing but we do have solution to that. What they are doing around that axis right now are just palliatives to make the place motorable. We have a serious plan for the road. Meanwhile, I have even been castigated on why I want to spend such amount of money on that interchange but it is a project that we believe will change the face of that place and sanitise the area.
“The Honourable Commissioner for Works is working on it and we need to follow the due process. So, it’s a little bit slow but I believe, within the shortest possible time, we can get this project underway and delivery has been given to us at nine months. Once we flag it off, within nine months, we believe we will be able to decongest the area and everyone will be proud of it.”
The Governor, therefore, stressed that he would consider urgently the modern trailer park project, noting that it was not ideal for trailers to cluster around the highway, saying, however, that the only justification to remove them would be to provide a modern park for them.
Governor Makinde added: “What you mentioned about a trailer park will be sorted out. Before now, I have had discussion with the sector commander and Chairman of OYRTMA and I asked them to, first of all, clear that Toll Gate axis. About two weeks ago, I was going to Oyo and I saw illegal trailer parks along the road similar to what happens in Ogere. I was actually alarmed that once that kind of facility takes roots, it becomes difficult to uproot again.
“So, it’s something we are also committed to fixing. Ideally, we should not be seeing trailers along the road. All along the express way, from Toll-Gate to Ojoo, we still have where trailers are parking at different points along the road, but once we have trailer parks for them, we can be justified to relocate and disallow them by stopping them parking indiscriminately along the road.”
Earlier, Dr. Oyeyemi appealed to the Oyo State Government to give priority attention to the construction of a modern mega trailer park in the state, noting that the project would greatly help to reduce traffic gridlock in the state, “as Ibadan is strategic to vehicular movement across the nation.”
While stressing the need for collaboration with the corps to abate instances of road mishap during the ‘ember months,’ the Corps Marshal also implored the Governor to equally work on the Iwo road interchange and disallow street trading on the Ibadan-Iwo road, Ibadan-Ife road and other major roads in the state.
Photo credit: Shutterstock
Nigerian radio stations broadcast agronomy recommendations on cassava weed management, best planting practices
Three Nigerian radio stations are now broadcasting agronomic recommendations on the Six Steps to Cassava Weed Management and Best Planting Practices. The Six Steps to Cassava Weed Management and Best Planting Practices is one of the Decision Support Tools of the African Cassava Agronomy Initiative (ACAI). The radio stations include Splash FM (105.5 FM), Harvest FM (98.9FM) and Amuludun FM (99.1FM).
Research done by the Cassava Weed Management Project concludes that farmers are able to more than double the yield per hectare of cassava (from less than 10 tons per ha to more than 20 tons per ha) using the ACAI’s Six Steps to Cassava Weed Management and Best Planting Practices extension toolkit.
The three radio stations which are airing the toolkit are among the prominent listened to stations, according to Media Planning Services— an agency that advertisers depend on to make investment decisions.
The program on Ibadan-based Splash FM which is also streamed online is aired every Wednesday, 7.00 PM – 7.30 PM and is anchored by Seun Akinola with Godwin Atser, IITA Digital Extension and Advisory Services Specialist. On Benue-based Harvest FM, the program is aired in Tiv language by 1.00 PM -1.30 PM every Fridays and anchored by Joseph Kwaghdega with Atser, while Amuludun FM airs the Yoruba version every Tuesdays (5.00 PM – 5.30 PM) with Rasheed Adegbola as the anchor with Abiodun Olatoye, an extension agent with Oyo State Agricultural Development Program. Plans have also been concluded to broadcast the program on Radio IITA—an internet-based radio.
In several rural areas in Africa, radio is among the top medium used by farmers as a source of information. With the traditional extension system being overwhelmed, ACAI is using the radio platform to reach out to millions of farmers in Nigeria. The radio programs being promoted by ACAI are aimed at changing the behavior of farmers and influencing the adoption of ACAI recommendations.
Radio channels being selected were based on reach and listenership. ACAI plans to undertake a study on the effectiveness of the radio programs after six months. At the moment, the private sector is excited over the radio programs and partnership support is being received from pharmaceutical and life sciences company, Bayer. More companies are planning to sign-up.
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