Elon Musk, the CEO of electric car company Tesla and the eccentric entrepreneur known for his attention-seeking behavior, has secured the top spot on Forbes’ list of the 10 richest people in the world. With an estimated net worth of $237 billion, Musk’s wealth is hard to ignore. However, the second richest person, Bernard Arnault, CEO of French luxury group LVMH, has managed to maintain a low profile despite his wealth. Arnault, worth about $233 billion, is known for his business deals and his passion for art, collecting pieces by renowned artists such as Picasso, Henry Moore, and Andy Warhol.
Arnault’s professional career began in 1949 as an engineer, and he worked his way up to various executive management positions before becoming chairman of the Ferret-Savinel construction company in 1978. In 1984, he reorganized the Financière Agache holding company, returning it to profitability. He then embarked on a strategy to develop LVMH into the world’s leading luxury products firm, revitalizing Christian Dior in the process. In 1989, Arnault became the majority shareholder of LVMH and has been the chairman and CEO of the company ever since.
Earlier this year, Musk surpassed Arnault to claim the top spot on the Forbes list as spending on luxury items normalized and pent-up demand from the pandemic subsided. While luxury brands continue to thrive, tech firms have faced challenges, exposing economies overly reliant on them to risk.
Arnault is the only European on the Forbes list, which notably features no women. He leads the group behind iconic luxury brands like Louis Vuitton and Givenchy. LVMH, which owns 75 brands, has weathered the weaker demand in the US market better than its competitors Burberry and Cartier. The company benefits from a global footprint and a diverse portfolio of brands, including Moet & Chandon champagne and Tiffany jewelry.
According to Bloomberg, the European market is seeing the return of wealthy tourists post-COVID, leading to increased numbers of visitors to fashion hotspots like Paris and Milan. Luxury brands have long been an economic health indicator, showcasing consumer spending power. While tech companies have driven GDP growth in recent years, the durability of fashion and luxury brands should not be underestimated, especially as AI offers new opportunities for the sector.
Luxury goods companies like LVMH and its rival Kering have demonstrated resilience, surviving previous financial crises and maintaining consistent consumer demand. While tech products quickly lose value over time, fashion and jewelry retain their appeal, with vintage pieces often highly sought after. Despite the high prices, consumers still flock to trademark fashion looks and iconic luxury items.
For smaller countries like Ireland, it can be challenging to compete with established luxury goods markets like France and Italy. However, the impact of these brands can still be felt in Ireland, where demand for luxury brands remains strong. The head of Brown Thomas, a luxury department store, noted that despite income constraints, Irish consumers continue to seek out luxury brands. The lifting of mask mandates in the country further boosts consumer confidence.
While some countries are making strides in the luxury goods market, it remains dominated by established fashion capitals like Paris, Milan, and Switzerland. These strongholds for luxury brands make it difficult for smaller countries to establish a significant presence. Nonetheless, the demand for luxury brands in Ireland and other countries remains robust, indicating that the sector can play a vital role in boosting the economy, even as tech companies face challenges.