I was surprised to see Bernard Arnault as the richest man in the world, above Jeff Bezos, Elon Musk, and Bill Gates. He owns an empire of fashion and jewelry brands like LV, Givenchy, Tiffany Co. etc. as well as luxury booze companies like Moet and Hennesey.
How are fashion and jewelry businesses worth more than tech and innovation in the year 2021?
Are there really masses out there spending all there disposable income on 500 dollar t shirts and 6 thousand dollar bags? Flexing on Instagram and popping bottles in the club. I’ve seen the type on Instagram, but I thought surely they must be a minority, and not large enough a market to top giants like Elon Musk and Amazon. I must be really out of the loop.
In: Economics
Because there are plenty of rich people to support the industry?
Also, you might not be at that stage of life yet, but a well fitted wool sports coat is quite comfortable in the cooler weathers. A custom tailored suit is incredibly comfortable. Once your career gets going, it’s not inconceivable to get a few sports coats. I usually wear them to the office even though we’re not that strict on attire.
There really are people with that much disposable income. There’s a good statistic that will probably shock you. In an interview, CEO of Hublot and Swiss watch industry legend, Jean Claude Biver said, “A person buying a $5000-$10000 watch usually waits 10 years to buy another one that expensive. But for someone that spends $100,000 on a watch, the gap is only 6 months to get another one.”
You’d probably discover with a little more research on both industries that it really isn’t; regardless LVMH doubles as high end consumer retail brands, which are high volume. Credit cards and personal budget reallocations make any purchase possible
LVMH controls a huge amount of disposable incomes of people who don’t care about giant markup. That makes for killer margins.
He owns/operates quite a bit more than fashion brands:
*Arnault is a familiar name to many fashion obsessives, as LVMH owns many exalted brands in the industry, including Christian Dior, Celine, Givenchy, Loewe, Fendi, Bulgari, Tiffany & Co., Sephora, and Fenty, briefly, in addition to the aforementioned Louis Vuitton and Moët Hennessy. The company also controls several wine and spirits brands (including Veuve Clicquot, Chandon, and Belvedere) as well as the luxury yacht company and the high-end hotel brands Cheval Blanc and Belmond.*
Luxury yacht company? CHECK
High-end hotel chain? CHECK
Booze companies? CHECK
You’re assuming he is only in fashion and luxury. He is also in media, music and entertainment if I remember correctly. He is quite diverse.
Wealthiest men get their worth evaluated mostly through their stock shares. Stock prices reflect hypes of investors at the moment. It’s not any real dollar until the shareholder sell it and someone wants to buy it. They don’t take the accountant report when they calculate those flashy headlines about richest men. It’s all just tabloid reporting really.
Besides the amount of shares they have in their respective companies may differ.
Tech companies worth is inflated by the hype of investors (example : Tesla vs General Motors despite massive differences in sales, assets and everything really).
There are two industries which are basically hype machines : Entertainment and Luxury. Bernard Arnault is big in both.
Besides he is quite the predator, aggressively trying to take over companies only to resell them later. As far as I am aware Musk and Gates aren’t known as such predators.
He is also very very close from the French executive which probably helps him get quite a lot of information and nudge policies his way (out of the last 3 president, he was the best man at President Sarkozy’s wedding during his term, he had President Holland to inaugurate stuff for him, the current first lady was his kids literature teacher in high school).
PS : the bread and butter of the fashion industry isn’t the expensive designer dress, it’s all the cunts who bought a 360€ Louis Vuitton face mask. If you think that’s stupid, remember how much you pay for an Apple logo or a few LEDs on a Razor or Alienware product. Welcome to branding.
The tech companies are worth more, but a founder’s ownership stake matters most in terms of determine personal wealth. Apple and Amazon are worth way more than LVMH, but it’s founder could and does own a much larger percentage of the company.
They’re not. Arnault was *born* rich, the son of a manufacturer. Jeff Bezos was born the son of a teen mother who was still attending high school. Not hard to win the race when you’re born first place.
The top comment is the best answer but I feel I have to address
>Are there really masses out there spending all there disposable income on 500 dollar t shirts and 6 thousand dollar bags? Flexing on Instagram and popping bottles in the club.
Yes
Yes there are
Amazon’s market cap is about $1.7T. Bezos owns about 11% of that.
Microsoft’s market cap is about $1.9T. Gates owns just over 1% of that.
Tesla’s market cap is about $590B. Musk owns about 20% of that.
LVMH’s market cap is $410B. Arnault owns about 46% of that.
So there’s a couple things going on here: First, Tesla isn’t worth nearly as much as you probably thought, because it hasn’t been hugely profitable, and investors assume that, as it competes with the likes of GM, Toyota, etc., it will never be dominant in its market the way Microsoft or Amazon are.
Second, Arnault owns a much larger share of his company, having taken on less investor money to get the company where it is. This is mostly due to the fact that the constituent companies have been around forever by comparison to the tech companies, so they could grow more organically.
Finally (or, related to point two), Bezos lost ~~half~~ a quarter of his shares in his divorce and Gates has sold off most of his shares over time.
Interestingly, if Gates would still own the same percentage of Microsoft as he did in 1986, he’s be worth just shy of a trillion dollars.
Correlation does not mean causation. Arnault has more money and Arnault owns an empire of luxury does not mean luxury is worth more than tech.
For starters, Bezos, Musk and Gates don’t own 100% of Amazon, Tesla and Microsoft.
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