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Bernard Arnault, the world’s fourth richest person
Economy

Bernard Arnault, the world’s fourth richest person

Monday, 21 March 2011
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Christophe Roulet
Editor-in-chief, HH Journal

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3 min read

Forbes has published its 2011 list of the world’s richest people. Bernard Arnault, 61, Chief Executive of LVMH which recently added Bulgari to its portfolio, has climbed three places to fourth position, behind Mexican telecom mogul Carlos Slim (US$ 74 billion / € 52 billion), Bill Gates, founder of Microsoft (USD 56 billion / € 39.5 billion), and Omaha guru Warren Buffet (US$ 50 billion / € 35 billion). As LVMH shares surged +57% last year, Arnault added US$ 13.5 billion (€ 9,5 billion) to his fortune and now has a net worth of US$ 41 billion (€ 28,9 billion).

It has taken Bernard Arnault some two decades to build up a luxury empire that spans fashion, champagne, fragrance, jewellery, leathergoods and watches… and which for the first time last year posted revenues in excess of € 20 billion (US$ 28.4 billion) (+19%). On graduating from École Polytechnique, Arnault took the head of the family construction business. When the Socialist Party was elected to power in France in 1981, this dyed-in-the-wool liberal emigrated to the United States. Returning three years later, he began looking for a business project he could get his teeth into. It would take the form of ailing textile firm Boussac. Arnault bought the company, which was crippled with debt, and began a drastic downsizing regime. The strategy paid off as Arnault sold the company’s assets to retain only the jewel in its crown: Christian Dior.

But Arnault had bigger ambitions and trained his sights on LVMH. He was called to the rescue by shareholders who were tired of conflict between Alain Chevalier, CEO of Moët Hennessy, and Henry Racamier, President of Louis Vuitton. Arnault was again the new brush that swept clean, mounting various legal and financial dealings that allowed him to take control of the group and evict its executives. From that point on, he would focus on growing LVMH into a luxury giant. In 1987, it had just ten brands. A little over twenty years later, this figure has climbed to around 60 (Givenchy, Fendi, Céline, Hublot, Tag Heuer, Château d’Yquem, Veuve Clicquot, Hennessy, Sephora, etc.). LVMH is now a multinational that employs 80,000 people worldwide. Arnault controls 42% of the capital through a series of holdings. It has a market capitalisation of € 55 billion (US$ 78 billion). Accused by some of being “a wolf in cashmere clothing,” Bernard Arnault replies: “Business is like a game of tennis. You battle it out and shake hands at the end.”

Bernard Arnault’s position at the head of this luxury giant has also allowed him to nurture his passion for culture and the arts. A gifted pianist and renowned collector, he is one of France’s foremost patrons. The Fondation Louis Vuitton pour la Création will be a centre for contemporary art and architecture to the west of Paris. The building is the work of Franck Gehry, creator of the Guggenheim in Bilbao. Construction, which is well under way, was suspended earlier in the year when the building permit was withdrawn. The Paris Council immediately appealed so that this project, whose purpose is to “promote culture and France throughout the world” can be taken to completion.

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