How Bernard Arnault briefly became the world’s richest person

On May 24 investors woke up to news that Amazon.com founder Jeff Bezos was no longer the world’s richest person. The outgoing Amazon CEO was dethroned by a name mostly unfamiliar to the investment community: France’s Bernard Arnault.

Arnault is CEO and chairman of French luxury goods brand Louis Vuitton Moet Hennessy, or LVMH for short. For a short period of time on May 24, he was a mere $300 million richer than Bezos. But when Amazon’s stock picked up momentum on the same day, Bezos reclaimed his throne as the world’s richest.

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But that didn’t last long. Arnault proceeded to reclaim the world’s richest status on two separate occasions throughout the week. By Friday, Arnault had secured a comfortable lead with a net worth of $192.1 billion against Bezos’s $187.4 billion. 

This flip-flopping was due to price movements in both Amazon and LVMH’s shares. Amazon is worth north of $1.6 trillion so even a 2% move lower in the stock would notably tilt the rankings in Arnaud’s favor.

US-based entrepreneurs like Bezos and Tesla CEO Elon Musk with a net worth of $150 billion are household names. After all, Bezos revolutionized e-commerce and Musk revolutionized the transportation space.

So what exactly is Arnault known for? We break down how he made his money, how high his net worth could go, and we will also examine if any of his fellow Europeans can one day rise to become the world’s richest person.

Who is Bernard Arnault?

Arnault was born in Roubaix, France, in 1949. He worked as an engineer before joining his father’s construction company where he served as president from 1978 to 1984. In 1984, Arnault found a career in real estate development before finding his true calling in managing luxury goods.

Arnault first bought the luxury goods company Financiere Agache which was the parent company of the Christian Dior brand, among other high-end brands. At the helm of the company, he divested all of the assets except for the Christian Dior brand and Le Bon Marche department store.

In 1989, Arnault became the majority shareholder of LVMH through a hostile takeover. Arnault also took over as chairman and CEO, positions he has held ever since. This marked the very early days of a global luxury goods empire that Arnault assembled piece by piece.

How did Bernard Arnault become the world’s richest person?

Arnault’s net worth is so high because he spent billions of dollars over several decades in building the world’s most iconic luxury holding company. Some of the acquisitions from the 1990s included Berluti, Kenzo, Marc Jacobs, Gucci Group, Tag Heuer, Sephora, among others.

The pace of notable M&A deals accelerated in the 2000s. Notable deals include majority stakes or complete acquisitions of Fendi, DKNY, Hermes, and others. By the 2010s, Arnault was leveraging the brand’s power status and formed new labels, including a joint venture with Rihanna.

Arnault saved his biggest deal yet for 2020 when he offered around $16 billion to acquire US-based Tiffany & Co.

Once the COVID-19 pandemic hit, shares of LVMH tumbled. The world was dealing with a new virus, shopping tourism was ground to a halt, and even those who can afford high-end goods thought twice about splurging amid uncertain times.

Fortunately, the tide has turned in 2021. LVMH kicked off the year by closing the Tiffany transaction after a legal spat previously put the deal in jeopardy. April and May were particularly impressive months for LVMH’s share price, driven by a resurgence of demand in the key Chinese market.

By May, signs of a return to some form of normalcy emerged in many countries worldwide, giving investors confidence that consumers will soon resume prior shopping habits. Continued momentum could push Arnault to be the second person after Bezos to be worth more than $200 billion.

Could another European become the world’s richest person?

The US markets are home to some of the largest corporations so it is only natural that their leaders and founders rank among the world’s richest. In fact, eight of the 10 richest people in the world are American with Arnault and India’s Mukesh Ambani the lone outsiders.

In 2021, Bernard Arnault was the only European to make it into the top 10 but Spain’s Amancio Ortega held the 11th spot with a net worth of $77 billion. Ortega is the founder and former chairman of fashion group Inditex, the owner of Zara and other global brands, including Massimo Dutti, Bershka, Pull&Bear and Stradivarius. 

Ortega has ranked as one of the top 10 richest people since 2008. In fact, he was the world’s richest person on three separate occasions, although he unlikely broke out the champagne as he couldn’t hold on to the title for more than a few days. His most recent time as the world’s richest person was on August 31, 2017 when he woke up $200 million richer than Bill Gates but went to sleep $100 million poorer compared to the Microsoft co-founder.

Can Ortega or another European ever reclaim the world’s richest title? According to Invezz lead editor, Jayson Derrick it’s unlikely.

Despite Ortega’s wealth of around $88 billion, he needs to come up with more than $100 billion to challenge for the number one spot. The rough math behind the question implies Ortega needs to more than double his net worth while simultaneously shares of both LVMH and Amazon need to tumble down, says Derrick.

While Ortega may well return to the top 10, it seems highly unlikely he will reclaim the top spot as there is just too much catching up required. Even a return to a top-five spot seems out of reach as it would require him to become a centibillionaire and overtake Facebook CEO Mark Zuckerberg’s net worth of around $120 billion.

Similarly, L’Oreal’s Francoise Bettencourt Meyers has a net worth of around $89 billion and shares of L’Oreal are up more than 40% over the past year. Expectations for the stock to now more than double after an already strong gain are impractical. 

The next richest European is France’s Francois Pinault at $56.4 billion. It is unlikely if not impossible for the 84 year old to double his net worth, and then double it again.

Arnault’s surge to the front of the pack is a positive sign for Europe’s mega-rich, but for the time being the USA looks set to retain its dominance over the land of the centibillionaires. You wouldn’t find many who would bet against Bezos being top of the tree again in the near future, and as the world adapts to new technologies the influence of Silicon Valley is only likely to increase.