World’s Third-Richest Man Down $6 Billion In One Week As Luxury Businesses Struggle

THE CHANGING FORTUNES OF THE WORLD’S RICHEST

^The world’s third-richest person has shed $6 billion from his fortune in just one week. After a sobering earnings report for luxury fashion giant LVMH, the fortune of its chairman and CEO, Bernard Arnault, slipped to $106.2 billion, down from $112.1 billion a week ago.

Shares of LVMH plunged 8% during the week through July 31 after the firm revealed on Monday that its businesses–which include Louis Vuitton, Fenty and Hennessy–generated about $21.7 billion in sales in the first half of 2020, down 27% from the same period in 2019. While analysts expected sales to drop by about that much, LVMH’s profits plummeted a staggering 84% to roughly $615 million–well below analyst estimates. Shares fell 4% on Monday following the announcement.

“LVMH showed exceptional resilience to the serious health crisis the world experienced in the first half of 2020; our Maisons have shown remarkable agility in implementing measures to adapt their costs and accelerate the growth of online sales,” 71-year-old Arnault said in a statement released alongside the earnings report. “While we have observed strong signs of an upturn in activity since June, we remain very vigilant for the rest of the year.”

Despite a sharp rebound of sales in China during the second quarter, the luxury conglomerate blamed its lackluster performance on the lingering closures of its store and manufacturing sites elsewhere in the world and the continued suspension of international travel. Sales of fellow French luxury fashion house Kering were hit a bit harder; the Gucci parent revealed revenue fell close to 30% in its second half when it reported earnings on Wednesday, but shares managed to end the week roughly flat. The fortune of Kering’s billionaire founder and honorary chair, Francois Pinault, held steady this week; he’s worth $38.3 billion and ranks No. 27 in the world.

Stocks in the broader CAC 40, a benchmark French stock index that includes both LVMH and Kering, fell 3% during the week, while in the U.S., the S&P 500 edged up about 2%. 

Arnault got his start by using $15 million from his father’s relatively small construction fortune to buy Christian Dior in 1985. Arnault amassed a $100 billion fortune by late last year and kicked off 2020 on a high note, overtaking Jeff Bezos to become the world’s richest person in January, though it proved to be short-lived. With the fashion industry reeling from the coronavirus, the decline in Arnault’s net worth since Friday, July 24 was the largest among the world’s billionaires during the week. In contrast, Jeff Bezos, the world’s richest person, was the week’s biggest billionaire gainer, adding more than $3 billion to his fortune and ending Friday worth $181 billion, as Amazon stock remains near all-time highs.

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