Six months ago, Bernard Arnault held the title of the world’s richest person. As the founder and CEO of LVMH, the French luxury giant, he was ahead of big names like Tesla’s Elon Musk and Amazon’s Jeff Bezos. Back in late March, his fortune was estimated at around INR 19.3 lakh crore ($231 billion). But now, Arnault has dropped to fifth place on the Bloomberg Billionaires Index.
Since then, the fashion mogul’s wealth has taken an INR 4.5 lakh crore ($54 billion) hit, dropping to INR 14.8 lakh crore ($177 billion) by the end of last week. This shift has knocked him down to fifth place on the list of the world’s richest, now trailing not just Elon Musk and Jeff Bezos, but also Meta’s Mark Zuckerberg and Oracle’s Larry Ellison.
He’s the only one among the 18 wealthiest people who has seen his fortune decrease in 2024. While everyone else has added at least INR 1.3 lakh crore ($16 billion) to their wealth—Zuckerberg even gained INR 5.9 lakh crore ($71 billion)—Arnault is the lone figure in the red.
Forbes’ wealth rankings reflect a similar trend. Arnault went from holding the top spot with a net worth of INR 19.4 lakh crore ($233 billion) on March 8 to falling to fifth place, now worth INR 14.7 lakh crore ($176 billion). He’s now behind Musk, Bezos, Ellison and Zuckerberg.
The drop in Arnault’s wealth is tied to a 16% fall in LVMH’s stock price, hitting its lowest point in two years. Arnault owns about 48% of this luxury powerhouse, which includes around 75 brands like Tiffany & Co., Louis Vuitton, Dom Perignon and Sephora.
LVMH’s shares have taken a hit due to some challenges the company has faced. In the first half of this year, their underlying revenues only grew by 2%, while income from recurring operations fell by 8%. Profits in key areas suffered too, dropping 26% in the Wines & Spirits division, 19% in Watches & Jewelry and 6% in the important Fashion & Leather Goods segment.
In the earnings release, Arnault also mentioned a “climate of economic and geopolitical uncertainty.” At the same time, Bloomberg reported last month that Sephora was cutting 10% of its 4,000 employees in China to cope with a tough local market.
After the pandemic, the luxury industry saw a surge as travel picked up and people rushed to shop. However, it has faced challenges lately, with high inflation, rising interest rates and worries about a recession dampening demand, even among wealthy shoppers.
This post was last modified on September 25, 2024 4:48 am