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
Everyone is missing the vary obvious answer here. Tech giants are worth more than luxury fashion companies. Louis Vuitton, which is the largest company Bernard Arnault owns, is only worth [$47.2 Billion](https://www.forbes.com/companies/louis-vuitton/?sh=298727d36dbe). Where as for example Amazon is worth over [$1 Trillion](https://www.marketwatch.com/story/amazon-is-officially-worth-1-trillion-joining-other-tech-titans-2020-02-04).
The reason Bernard Arnault is worth so much money is not because fashion is more valuable than tech. It’s because the super wealthy tech giant owners mostly only own one company. 80% of Jeff Bezos net worth is from his ownership in Amazon. Where as Bernard Arnault owns over 70 companies.
That is why he is the wealthiest man in the world.
Amazon and tesla(among many other companies) are worth a good bit more than his. But he owns a larger share. Did not need as many investors to get where he is.
Not masses. Tech giants have a huge market, but sell lots of less expensive things. Their profits balloon due to sales volume.
Exclusive fashion has a much smaller market, and much higher production cost (mostly labour), but the markup is absurd because of exclusivity. And lets be realistic, once you have enough money to buy top quality versions of the things the masses buy, the next step is buying things no one (or very few others) will have. Luxury brands do production items, but also limited editions and single editions. Add a few zeroes to the price with every level of exclusivity.
Short answer, yes. Long answer, yes and it has been that way for a very long time.
There are only so many tech products a person will buy in their lifetimes. Peak income for the typical middle-high income earner is going to be in their late 40s to mid 50s. At those ages, discretionary spending is not likely to be tech-biased.
These brands are *affordable* luxury.
https://www.tiffany.com/gifts/shop/gifts-for-dad/price-0-500/
The price of the highball glasses is lower than the price of AirPods.
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