Bernant Arnault is falling down the rankings of the world's richest people
All may not be going well for Bernard Arnault, who owns luxury brands Louis Vuitton and Dior, after a whopping $54 billion wipeout.
LVMH’s Arnault was once considered to be the world’s richest man, but has now fallen to 5th place. With an aim to stay in his role longer, the founder of the Paris-based behemoth pushed to raise the retirement age from 75 to 80 in 2022.
“I have five members of the family working in the group, he told Bloomberg in an interview this year. “Let’s see if one of them has the capacity to take over.”
The 75-year-old boss had an estimated net worth of $231 billion in March, falling to $200 billion by June, before eventually plummeting to $177 billion on Monday.
While he still remains wealthier than former Microsoft (MSFT) CEOs Bill Gates ($163 billion) and Steve Ballmer ($150 billion), he now ranks lower than Elon Musk ($265 billion), Jeff Bezos ($216 billion), Mark Zuckerberg ($200 billion) and Larry Ellison ($178 billion), according to the Bloomberg Billionaires Index.
The drop in Arnault’s rank comes after the company’s stock price dipped 20%, wiping out $54 billion from his net worth. LVMH reported a fall in revenues, with its wine and spirits section being hit the hardest. According to its earnings report, Champagne sales declined 15% in the first half of the year compared to the same period a year ago.
But LVMH is not alone. Analysts at Bank of America Securities (BAC) recently downgraded European luxury stocks, citing sectorial slowdown into the second half of 2024 and next year. While LVMH was downgraded from “buy” to “neutral, Germany’s Hugo Boss (BOSSY) was moved from “buy” to “underperform.”
The bank analysts warn of falling demand for luxury brands among high-spending Chinese consumers. Across European luxury firms, the Bank of America analysts expect a 1% revenue decline in 2024, addressing challenges across the luxury sector.
France remains a key exporter of luxury bags in China. According to a study by consultancy Asterès, LVMH’s fashion exports accounted for 4% of total French exports in 2023.
But LVMH may face some headwinds.
The ongoing tensions between China and Europe could also put LVMH in a tough spot. The challenge also comes at a time when there have been some leadership shifts in the organization, with all five of Arnault’s children in operational roles and four having board seats.
