Bernard Arnault, Europe’s wealthiest man, saw his net worth decline by $5 billion as investors reduced their holdings in what is the world’s most prestigious luxury stock.
Arnault is the CEO of LVMH Moet Hennessy Louis Vuitton, and the third richest person in the world with a net worth of $165 billion.
The French luxury guru is behind some of the biggest luxury fashion brands in the world.
LVMH Fundamentals
After reporting fresh sales and profit records last year, driven by booming demand in the US and China, the world’s biggest luxury group, LVMH, is nonetheless confident of continuing its fast-paced growth.
The Paris-based company announced recently that its revenues last year totalled 64.2 billion euros ($71.6 billion), breaking the previous record set in 2019 before Covid-19 lockdowns closed stores and kept shoppers at home. According to analysts, revenue was expected to be 62.2 billion euros.
In addition, the firm controlled by billionaire Bernard Arnault increased its dividend to €10 per share, a two-thirds increase over last year.
Despite lingering travel restrictions and store closures, Louis Vuitton and Christian Dior continued to attract affluent shoppers during the pandemic.
On the flip side, these top-tier brands have opened a gap between themselves and smaller independent brands that have lost market share and found it difficult to compete in an arms race of advertising and eCommerce.
Still, with wealthy customers returning to boutiques, the performance of the luxury giant exemplifies the V-shaped recovery experienced by most of the industry. Rising asset prices and a recovering economy fueled the rebound.
Bernard Arnault and the valuation of family wealth
- LVMH Moet Hennessy Louis Vuitton is the world’s largest luxury goods maker. Its chairman, the 72-year-old Frenchman is also France’s richest person.
- The company had revenues of 44.6 billion euros ($51 billion) in 2020, which he controls about half of. Louis Vuitton leather goods, TAG Heuer watches, and Dom Perignon champagnes are among the products it sells.
- Christian Dior, Dior’s luxury fashion house, accounts for 97.5% of Arnault’s fortune.
- According to Dior’s 2020 annual report, he holds the shares through entities associated with Groupe Familial Arnault.
- The family holding company of Dior is credited with all shares held by Bernard Arnault, along with its other holdings, in recognition of its founder and patriarchal status.
- LVMH, the world’s largest luxury goods company, is controlled by Christian Dior at 41.2%, according to Dior’s 2020 annual report.
- As per its 2020 registration document, the family holds 6.2% of LVMH, and these shares are included in the calculation of net wealth.
