Bernard Arnault was born on March 5, 1949, and is the Chairman and CEO of LVMH (Mot Hennessy Louis Vuitton SA), a luxury goods holding company. He controls approximately 50% of a massive conglomerate that owns over 70 of the world’s top luxury brands, including Christian Dior, Louis Vuitton, Dom Perignon, Mot et Chandon, Hennessy, Sephora, and TAG Heuer.
Bernard Arnault Biography
Bernard Arnault began his career as an engineer and property developer in his family’s civil engineering company in the industrial north of France, which is unusual for a CEO in the fashion industry. By 1984, he had ambitions that extended far beyond construction, and he began a series of brave and ruthless moves to take over a global enterprise.
To that end, he purchased Boussac, a famous (but bankrupt) French holding company, in order to take over one of its subsidiaries: the House of Dior, a prize he had coveted for years. He reinvested the proceeds from the sale of most of the other assets into his next luxury targets, Mot Hennessy and Louis Vuitton, two iconic French companies that merged to form LVMH in 1987.
Arnault’s next move was a power play that cemented his reputation across Europe. Once inside LVMH, he used the constant feuding between the two CEOs to gain control and then ousted the two warring CEOs.
He became Chair, CEO, and majority shareholder of LVMH after winning “one of the fiercest battles in French fashion,” a position he will hold until April 2022.
Over the next three decades, he combined the assets of the defunct Boussac with the LVMH brands and dozens of acquired companies to create the world’s most powerful luxury conglomerate, with revenues of €44.6 billion ($51 billion) by 2020.
Bernard Arnault eduacation and early career
Bernard Arnault was born in 1949 in Roubaix, an industrial city in northern France, where his father, a prominent manufacturer, owned the Ferret-Savinel civil engineering and property company. Arnault’s mother, who had a “fascination for Dior,” ensured that her son received classical piano training.
in 1971, Arnault earned an undergraduate degree from École Poly technique, the most selective engineering school in France, and joined his father’s business as Chief Construction Officer.
Bernard Arnault displayed the boldness and business acumen that would later make him famous in his first role out of university, including convincing his father to sell the construction business and increase investment in real estate. By 1976, Arnault was “years ahead of the competition” in a highly profitable, brand-new sector of real estate: building time-share properties.
Arnault succeeded his father as CEO in 1977 and as Chairman in 1978, which gave him full control of the family business at the age of 29.
When the French socialist party came to power in 1981, Arnault relocated his family to the United States, where he spent three years growing Ferret-property Savinel’s business. As he navigated the competitive US market, he developed ambitions beyond construction and real estate, and he began looking for a scalable enterprise, ideally “a business with French roots and international reach.”
Bernard Arnault wife and Family
Bernard had two prior marriages. He had Anne Dewavrin as his first wife. The couple got married in 1973, however, their union did not survive long as they divorced in 1990.
After that, he wed Hélène Mercier, and the two have been together ever since. The proud father of five children’s.
Four of his five children work for the LVMH conglomerate: Frederic, Delphine, Antoine, and Alexandre. His fifth child, Jean Arnault, is only 24 years old and frequently flaunts his opulent lifestyle on social media.
Bernard Arnault Visionary Entrepreneur
When Arnault returned to France in 1984, he began his legendary rise to control of the world’s largest luxury conglomerate. During these early years, he also began to attract a devoted fan base as well as a vocal circle of detractors. His admirers saw him as a visionary entrepreneur who reinvented French business.
To his critics, he was “the wolf in cashmere,” who brought an “Anglo-Saxon ruthlessness to the genteel world of 1980s French business”—no more than “a corporate raider dismantling centuries of tradition.”
The House of Dior
Arnault made his first move in 1984, when the French government was offering subsidies to any company that could save Boussac, a famous (but failing) textile and retail empire with several struggling businesses under its umbrella—including a world-famous prize that Arnault had coveted for years: The House of Dior.
Arnault formed a holding company (Agache Financiere) with $15 million of family money and $65 million in financing from investment firm Lazard Fréres and acquired the bankrupt Boussac—for no other reason than to get Dior. Arnault became known as “a force to reckon with in French business” due to the highly effective but ruthless methods he used to turn around Boussac.
Takeover of LVMH
In 1987, Bernard Arnault began investing in his next luxury target, Mot Hennessy and Louis Vuitton, two iconic French companies that had merged into LVMH that year, with $500 million in cash from divesting Boussac businesses.
Arnault first invested in LVMH at the invitation of Louis Vuitton CEO Henry Racamier, who wanted his support to strengthen his position against Alain Chevalier, CEO of the much larger Mot Hennessy. Racamier and Chevalier had been feuding and fighting ever since the merger, which provided Arnault with the opportunity he needed. Arnault had enlisted Lazard Frères, the U.K., by the time Racamier realized his ally had his own ambitions. Guinness and the Mot Chandon and Hennessy families helped him secure a 45% controlling interest in LVMH.
Financial Discipline and Creativity
Over the next three decades, as he brought the best luxury brands in fashion, cosmetics, and beverages under the LVMH umbrella, Arnault proceeded to make “a series of brilliant business decisions” that “can only be described as masterful.” Even his critics were impressed by “his ability to manage creativity for the sake of profit and growth.”
The World’s Most Valuable Luxury Brands
In the decade after Bernard Arnault takeover, as he built a portfolio of the most exclusive assets in luxury, the value of LVMH “multiplied fifteen times over and sales and profit increased fivefold.”
According to the Millward Brown Optimor BrandZ study that year, LVMH owned or had a stake in five of the luxury industry’s ten most valuable brands by 2011. Louis Vuitton, LVMH’s profit engine, was named the world’s most valuable luxury brand for the sixth year in a row, with a brand valuation of $24.3 billion—”as much as the combined values of Hermes, Gucci, and Chanel, which ranked second, third, and fourth.” Across industries, Louis Vuitton ranked 26 out of 100 companies in 13 industries—a list that included Apple at the top.
Deal Maker in Luxury Business
Following acquisitions of German luggage brand Rimowa in 2016 and luxury travel group Belmond (owner of the Cipriani Venice hotel) in 2018, Arnault cemented his reputation as “the most acquisitive deal maker in the luxury business” in 2019, when he announced the largest deal in the history of the luxury sector: the $16.2 billion acquisition of US jeweler Tiffany & Company.
Bernard Arnault Success Story
In 2019, the Financial Times described the famously competitive Bernard Arnault as having “a compulsion to possess beautiful brands and transform their creativity into profits.” Within four decades, he built LVMH “from a near-bankrupt French textile company to a global group with €46.8 billion in sales (2018)” and a portfolio of over 70 of the most desirable luxury brands in the world, including Louis Vuitton, Dior, Givenchy, Veuve Clicquot, and Dom Pérignon.
In 2020, a New York Times article about the Tiffany acquisition—and Arnault’s legendary ability to come out ahead in every deal—quoted a luxury executive, who said, “His approach is not unusual in the M&A game—it’s just unusual in this industry. He acquires brands the Wall Street way, but then he holds them. He thinks in generational terms. He’s not a gambler; he’s a strategist.” An academic in Paris said that “he’s not afraid of engaging in a fight, but…he’s constantly evaluating the outcomes, and can put ego to the side in the service of the result”—and for that reason, “even when he loses, he wins.
Has Bernard Arnault Lost a Deal?
Gucci
After a decade of successful conquests, Bernard Arnault lost the “handbag war” in 2001, when his French rival, François Pinault, took control of Gucci, the Italian fashion house that LVMH had been pursuing. Although Bernard Arnault has denied any resentment over this unusual defeat, when the Pinault family donated €100 million to rebuild Notre Dame Cathedral after the 2019 fire, the Bernard Arnault family donated €200 million.
Hermès
Over the next ten years, Bernard Arnault continued to buy up brands like Bulgari (2011) and Loro Piana (2013)—and then tried to go after Hermès, an extremely successful Parisian leather house run by the sixth generation of the founding family, who are “fiercely protective” of maintaining control. When the Dumas family realized that Arnault had used “a stealth tactic common among hedge funds—cash-settled equity swaps”—to acquire 17% of the company, they fought him off in a battle that ended in 2014, when a French court ruled that LVMH had to sell down its stake.
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Bernard Arnault Net worth
- Bernard Arnault oversees the LVMH empire of some 70 fashion and cosmetics brands, including Louis Vuitton and Sephora.
- In January 2021, LVMH acquired American jeweler Tiffany & Co for $15.8 billion, believed to be the biggest luxury brand acquisition ever.
- LVMH spent $3.2 billion in 2019 for luxury hospitality group Belmond, which owns or manages 46 hotels, trains and river cruises.
- His father made a small fortune in construction; Arnault got his start by putting up $15 million from that business to buy Christian Dior in 1985.
- Four of Arnault’s five children work in corners of the LVMH empire: Frédéric, Delphine, Antoine and Alexandr
- As on at the time of writing this article on him the networth value is $176 billion.
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Summarized
Since Arnault’s 1989 power play to take over LVMH made him infamous throughout Europe, industry observers have credited his outstanding success in a highly competitive industry to the fact that he understands both the creative and the financial aspects of running a luxury business.
On the creative end, as Bernard Arnault built LVMH into a luxury empire, he has proven himself an expert at hiring design talent for star brands that “speak to the ages” but “feel intensely modern.” However, because his model requires that “the counterbalance to creativity must be commerce,” he never hesitated to reign in, or outright terminate, creative executives who did not produce. An industry insider explained Arnault’s tactics as an approach that is “not unusual in the M&A game—it’s just unusual in this industry—he acquires brands the Wall Street way.”
This unusual balance of financial and creative skills enabled Arnault to combine the assets of a bankrupt company with LVMH and numerous acquired brands to create the world’s most powerful luxury conglomerate—with revenues of €44.6 billion ($51 billion) by 2020.
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