… 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
Makinde presents cash donation to Yemi Likedat’s widow
Oyo state governor, Engr. Seyi Makinde has presented a cash donation to the family of the late Peoples Democratic Party (PDP) member, Comrade Yemi Adeniran (Likedat).
This came two months after the government gave an automatic employment to the wife of the deceased, Mrs. Yetunde Adeniran, at The Polytechnic Ibadan.
The Special Assistant (Print Media) to Governor Makinde, Moses Alao, in a statement signed on Tuesday revealed.
Yemi Likedat, as he was popularly known, died in a motor accident in December 2019 on his way from Abuja, shortly after witnessing the Supreme Court judgment on the 2019 governorship election in Oyo State won by Engineer Makinde.
The statement added that Governor Makinde who was represented by his Special Adviser on Strategy and Political Matters, Honourable Babatunde Oduyoye at the event which took place at the Governor’s Office, Secretariat, Agodi, Ibadan naintained that the administration will continue to identify with the family though nothing could replace the deceased party loyalist.
The governor said: “On behalf of the Executive Governor of Oyo State, Engineer Seyi Makinde, I want to welcome you to the Secretariat. About eight months ago, we lost a friend, a comrade, someone who believed in the vision of this administration.
“We were there together for the service of songs and the burial and we promised to stay with the family. We identified about four steps. This is the second step.
“The governor intends to give succour to the family. There is nothing that the government can do to replace Yemi but, at least, we will continue to do what we should do to identify with the family and ensure that the children, most especially, get the best of education he would have loved to give them.
“We want to show how important he is to this administration and that is why we have few people around to welcome you here.
“So, this government will continue to stand by you. We have taken care of the first step and this is the second one. Insha Allah, the two others will come to pass by the grace of God. So, on this note, I thank you for coming and urge you to continue to stand for the children. We also thank you for honouring us by coming.”
While speaking on behalf of the family, the wife of the deceased Mrs. Yetunde appreciated Governor Makinde for supporting and fulfilling promises he made to the family.
“We appreciate what the Governor did today in supporting and assisting the family; God will continue to provide for the family,” she said.
Government officials at the event include the Chief Press Secretary to the governor, Mr.Taiwo Adisa and the Special Assistant to the governor on Youths and Sports Development, Mr. Kazeem Bolarinwa among others.
Ex-president Obasanjo tests negative for COVID-19
Nigeria’s former President, Chief Olusegun Obasanjo has tested negative to Covid-19.
The ex- President took the test last Friday, August 7, 2020, at his Olusegun Obasanjo Presidential Library (OOPL) Pent House residence, Okemosan, Abeokuta, the Ogun State capital.
His special Assistant on Media, Kehinde Akinyemi, who disclosed this on Sunday explained that the samples of the test, conducted by one Dr. Olukunle Oluwasemowo of the Molecular Genetics Laboratory 54gene, Lagos, Nigeria, was returned negative on Saturday.
The laboratory, as gathered is one of the accredited laboratories approved by the Nigeria Centre for Disease Control (NCDC) to conduct the crucial Covid-19 test on both asymptomatic and symptomatic.
Oyo: Makinde fires Works commissioner, swaps two others
Oyo State Governor, Engineer Seyi Makinde, has fired his Commissioner for Works, Infrastructure and Transport, Professor Raphael Afonja of his appointment.
Governor Makinde, in a letter dated August 10, 2020 and signed by the Secretary to the State Government (SSG), Mrs. Olubamiwo Adeosun, said the termination takes immediate effect.
A statement by the Chief Press Secretary to the Governor, Mr. Taiwo Adisa, quoted the letter titled “Termination of appointment” as saying: “I wish to convey the approval of His Excellency, Governor Seyi Makinde, on the termination of your appointment as Honourable Commissioner, with immediate effect.
“Consequent upon the above development, you are hereby directed to hand over all the government items in your possession to the Permanent Secretary (Ministry of Works, Infrastructure and Transport).
“I am to add that, your contribution within the time of your sojourn is appreciated and commendable, and therefore, wish you successes in your future endeavours. I thank you.”
In another development, the governor has also approved the redeployment of two Commissioners, who were asked to swap portfolios.
An internal memo signed by the SSG with the subject: “Redeployment of EXCO members” indicated that the Commissioner for Special Duties, Chief Bayo Lawal, has been moved to the Ministry of Local Government and Chieftaincy Affairs, while his counterpart who was manning that Ministry, Hon. Funmilayo Orisadeyi, is to move to the Ministry of Special Duties.
The memo indicated that the redeployment takes immediate effect.
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