LVMH: The luxury conglomerate has been on an acquisition spree — and it has made its CEO the wealthiest person on Earth
Europe doesn't have a big tech sector. It doesn't have an enormously cheap manufacturing industry. What it does have is huge luxury goods companies — and this week the biggest of them all, LVMH (Moët Hennessy Louis Vuitton), saw its share price hit an all-time high. That also meant that Bernard Arnault, LVMH's CEO, became the world's wealthiest individual — unseating Elon Musk and Jeff Bezos thanks to a $186bn fortune, mostly in LVMH stock.
An eye for a bargain
Across its 75 brands, which LVMH calls "houses", you'd be hard pressed to find any products that could be considered cheap. Louis Vuitton, Christian Dior, Loro Piana, Bulgari, Tag Heuer, Tiffany & Co. and Hublot are just some of the bigger brands in the LVMH stable, and all are expensive. So it's ironic then that Bernard Arnault has built LVMH with an eye for a bargain, acquiring numerous brands — that have often been family-owned for years and years — and adding them to the LVMH stable.
LVMH's most recent acquisition, Tiffany & Co., will add more than $4bn of revenue to its Watches & Jewelry division when it is fully accounted for next year and will increase LVMH's sales in the US. But, just like every acquisition before it, Arnault isn't sitting on his laurels after the Tiffany deal. Last month LVMH invested €75m ($92m) into struggling Italian shoemaker Tod's, fuelling speculation of a larger deal. Tod's, which is still majority owned by descendants of the Italian founder, would be a textbook LVMH target. The dealmaker Arnault isn't done yet.
