The founder and CEO of the luxury powerhouse LVMH experienced a loss of $11.2 billion on Tuesday, as investors grow increasingly concerned that Americas economic slowdown will dampen demand for high-end goods.
The French tycoon, who owns top designer brands such as Louis Vuitton, Tiffany & Co and Christian Dior, had been enjoying a prosperous 2023 in which his personal wealth has ballooned.
Over the past year, the share prices of European luxury companies like LVMH had been surging despite economic woesuntil this week: About $30 billion was wiped from the European luxury sector on Tuesday, when LVMHs shares dropped by 5%.
Although the hit on Arnaults net worth didnt knock him off the top spot as the planets wealthiest person, it does see his lead on Tesla founder and chief twit Elon Musk narrow.
Despite the wipe-out, the 74-year-old still has $192 billion to his name and a $12 billion lead over Musks $180 billion fortunedown from a $21 billion lead on Mondayreports Bloomberg.
But Arnault shouldnt sit too comfortably: Musk lost his crown in very similar circumstances back in December 2022 when Teslas share price dropped.
How did Bernard Arnault make his fortune?
In 1971, Arnault kick-started his career by working at his fathers real estate company, where he proved he had an entrepreneurial mind from a young age: A 25-year-old Arnault convinced his father to sell the construction side of the business and shift its focus to property.
Arnault got his big break by putting up $15 million from that sale to buy the luxury goods company that owned the fashion brand Christian Dior, Boussac Saint-Frères, in 1984.
Following the acquisition, the billionaire fired 9,000 people working for the company, sold off most of the groups assets (except the Dior brand), and earned the nickname the Terminator.
But his tough approach worked: By 1987, the company started making profits, reportedly generating $112 million in earnings from a revenue stream of $1.9 billion.
In the same year, he partnered with Alain Chevalier, CEO of Moët Hennessy, and Henry Racamier, president of Louis Vuitton, to form LVMHand the rest is history.
Today, LVMH has some 75 luxury brands in its portfolio and, under Arnaults leadership, has grown to become the largest company (by market capitalization) in Europe.
Just last month, the Paris-headquartered conglomerate became the first European company ever to cross $500 billion in market valuation and Arnaults wealthwhich is largely tied to LVMHs shares, including a 97.5% stake in Dioralso topped $200 billion for the first time.
His five ultrawealthy children, who all work at LVMH brands, are vying to one day take over his luxury empire. But Arnault senior has shown no sign of slowing down with LVMH recently hiking its age limit for chief executives from 75 to 80.
