the-rise-of-bernard-arnault-the-richest-man-on-the-planet

The rise of Bernard Arnault: The richest man on the planet

The rise of Bernard Arnault: One of the richest men on the planet

“The things you own end up owning you.” – Tyler Durden

Known as the ‘Wolf in Cashmere’, Bernard Arnault takes pride in being the king of the booming fashion industry. You may have heard of fashion brands by the name of Louis Vuitton, St.Laurent, and Hennesey, and let me tell you, all of them (along with tens more) are under his gigantic corporation: LVMH

Volatility plays a huge role at the top! We have witnessed the rivalry of Elon Musk and Jeff Bezos before, but Bernard’s case is different, as he rules a completely different industry. 

LVMH’s pandemic driven rise:

LVMH has exploded in value since the COVID-19 pandemic. According to Cityam.com:

“Luxury product group LVMH has returned to growth for the first time in almost a year, with revenue of €14bn (£12.16bn) for the first quarter of 2021. The figure marks a 32 percent jump compared to the same period last year after the pandemic delivered serious disruption to the Louis Vuitton owner.”

 

But how did a mere 32% jump skyrocket Arnault’s wealth from 76$ billion in March 2020 to 198.9 billion? Well, in case you didn’t know, he owns a whopping 47% of LVMH which reached a record high of $416 billion as of Thursday (according to business insider.com).

You would be surprised to know that this 32% increase is the average of the other brands under LVMH that have seen more than 30% growth this year! 

Why the fashion industry is the perfect fuel for his rise:

The fashion industry has always been increasingly volatile and we have seen the death of numerous fashion brands within the last few years. You may have heard of Forever 21, which filed for bankruptcy back in 2017.

There are many such exceptional cases, but one thing that remains true is that the demand for luxury and branded products will always increase despite their value.

Let me ask you a simple question: What do you get from buying luxury products like a $45,000 Rolex?

 Nothing! It provides absolutely no value to your life. But if that’s the answer, then how do fashion brands convince smart people to buy their products? The answer is simple.

How the things you own, slowly start owning you: 

The ones with immense power (wealthy individuals) leverage others for their personal profit. However, most of them only end up using those who are poor, power-hungry, and desperate to make a living.

It is nearly impossible to control those who already have freedom and wealth; they can only partner with them. But this isn’t entirely true. Fashion brands have figured out the way to lure in successful people, by showing them products and telling them that these products separate them from the rest (those are not successful). These products are none other than luxury bags, purses, clothes, and much more, which are miles away from the average joe’s budget. Another point to remember is that everything depreciates over time, and many luxury products require monthly/quarterly maintenance, which adds to your burden. In this way, the items you own, slowly start owning you and the cash flow is often directed towards the manufacturer. 

The luxury car market uses the same strategy, but it’s just that fashion seems more appealing for the masses. After all, along with the product, execution also matters. Another surprising point is that the fashion brands which are already at the top, barely have to spend any capital on marketing. Social media does 90% of the work for them; millions out there show off their branded products to their followers. It’s nothing but a win-win situation for Bernard Arnault! 

The two Titans drop-down: 

The rise of LVMH’s stock price isn’t the only reason why Bernard Arnault is the richest man today! As unbelievable as it may seem, both Jeff Bezos and Elon musk’s net worth plummeted over time. In fact, Bernard Arnault had already surpassed Elon Musk long back on 18th May this year! IndiaToday.com provides us with additional information on the same: 

“It may be noted that Musk’s fortune has dropped over $9 billion this year and is the most among US-based billionaires tracked by the Bloomberg Billionaires Index. Meanwhile, Bernard Arnault, who has overtaken the Tesla CEO, has added the most to his net worth.” 

India today further describes the situation by giving us some numbers:

“Tesla shares slumped sharply after a global rout of technology stocks last weeks. Musk, who was on the top spot on the Bloomberg Billionaires Index in March, has seen his fortune reduce to $160.6 billion — down at least 24 percent for its January high.” 

 

If you wish to know more about Bernard Arnault, I recommend reading ‘The Taste of Luxury: Bernard Arnault and the Moët-Hennessy Louis Vuitton Story‘ 

What is Bernard Arnault also known as?

Also known as the ‘Wolf in Cashmere’, Bernard Arnault takes pride in being the king of the booming fashion industry. You may have heard of fashion brands by the name of Louis Vuitton, St.Laurent, and Hennesey, and let me tell you, all of them (along with tens more) are under his gigantic corporation: LVMH.

How do fashion brands lure successful people?

Fashion brands have figured out the way to lure in successful people, by showing them products and telling them that these products separate them from the rest (those are not successful). These products are none other than luxury bags, purses, clothes, and much more, which are miles away from the average joe’s budget.

How did Bernard Arnault become the richest man on the planet?

Well, in case you didn’t know, he owns a whopping 47% of LVMH which reached a record high of $416 billion as of Thursday.

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