Bernard Arnault Biography
Bernard Arnault is a French business magnate and investor, currently the richest person in France and one of the richest in the world. He has been serving as the Chairman and Chief Executive Officer of LVMH Moët Hennessy Louis Vuitton Company since 1989, and is also the main shareholder in the company. Born as the son of a businessman, Arnault was blessed with sharp business acumen from a young age.
After completing high school he enrolled at the prestigious Ecole Polytechnique and received a degree in engineering. Upon his graduation the young man joined his father’s civil engineering business as an engineer and also started planning for the company’s growth and expansion. He convinced his father to change the focus of their business to the booming real estate sector, and found significant success in the field. He eventually started acquiring other companies and became the owner of the prestigious Christian Dior brand and Le Bon Marché department store. When LVMH was created as a result of a merger between two companies, Arnault invested millions in the shares of the new company and became LVMH's first shareholder. Eventually he was selected chairman of the executive management board and in this position he led an extensive expansion plan and transformed the company into one of the largest luxury groups in the worldHe joined his father’s company after graduating from college. He started planning for the company’s expansion and growth and in 1976 he was successful in convincing his father to liquidate the construction division of the company and invest the proceeds in a more lucrative business.
The Arnaults received 40 million French francs from the liquidation of the construction division which they invested in real estate business, which was then a booming sector. Now renamed Ferinel, the company became a very successful one with a specialty in holiday accommodation.
Bernard Arnault became the director of company development in 1974, and was named the CEO in 1977. He succeeded his father as president of the company in 1979.
The French Socialists came to power in 1981, forcing Arnault and his family to move to the United States. Being the astute businessman that he was, he prospered there too, developing condominiums in Palm Beach, Florida. Eventually he began to build a U.S. branch of his family’s property business.
The political scenario in his native France changed in 1983. The French Socialists switched to a more conservative economic course and Arnault decided to return home.
The enterprising businessman saw a lucrative opportunity when the textile firm, Boussac Saint-Frères, went bankrupt. The textile empire comprised several businesses, including the couture house of Christian Dior. Arnault collaborated with Antoine Bernheim, managing partner of the investment firm of Lazard Fréres who arranged the financing for Arnault's acquisition of Boussac.
Arnault invested $15 million of his own money, and Bernheim helped him to raise the reminder of the reported $80 million purchase price of Boussac Saint-Frères. Upon this acquisition, Arnault sold most of the company’s assets, retaining only the prestigious Christian Dior brand and Le Bon Marché department store. He became the CEO of Dior in 1985.
After selling off most of the assets of Boussac, Arnault gained $400 million in the process. In 1987, he was invited to invest in LVMH by the company’s chairman, Henri Racamier. Arnault chose to invest through a joint venture with Guinness PLC that held 24% of LVMH's shares. Over the next couple of years, he continued to buy more shares in the company, spending several hundred millions in the process.
By January 1989, Arnault had managed to gain control over 43.5% of the shares of LVMH with 35% of the voting rights. He was then unanimously elected chairman of the executive management board.
After taking over LVMH, he fired several of the company’s top executives and chose to recruit new talent to revitalize the company. He was a tough taskmaster and was known for his inclination to quickly terminate employees who did not deliver according to his expectations.
He set about implementing an ambitious plan of growth and expansion of his businesses and acquired several other companies over the 1990s, including the perfume firm Guerlain (1994), Loewe (1996), Marc Jacobs (1997), Sephora (1997), and Thomas Pink (1999).
Bernard Arnault’s takeover of the luxury goods conglomerate LVMH was a highly ambitious one. He displayed his characteristic determination and ruthlessness in the systematic and well-calculated takeover of the company, and his successful integration of various famous aspirational brands into the group has inspired several other fashion companies throughout the world to do the same.