for years the top of the billionaires
list has been dominated by various tech
moguls
from bill gates and mark zuckerberg to
jeff bezos and elon musk
on may 24 2021 though bernard arnold the
ceo
of lvmh dethroned all the tech moguls
and became the richest person in the
world
with a net worth over 190 billion
dollars
so here's how a fashion tycoon was able
to beat out the owners of the largest
tech companies
in the world taking a look back at
bernard's roots
he was born on march 5th 1949 in rue by
france
unlike his peers at the top bernard was
not only born into a
law family but an opulent family who ran
a well-respected construction business
within france
bernard never really had that much
interest in the construction business
bernard's true passion was always music
but he was also practical
and knew that it would be nearly
impossible to make it as a concert
pianist
then again he did eventually become the
richest person in the world
so maybe he would have made it as a
concert pianist as well
nonetheless bernard chose to go the safe
route deciding to get an engineering
degree
instead bernard would attend one of the
most prestigious universities
in france equal polytechnic and
he would get a job at his father's
construction company in 1971.
that same year bernard visited the us
and this would accidentally turn into a
pivotal point
in his career while in new york bernard
would ride in a taxi
and in an attempt to start up some small
talk bernard would ask the taxi driver
if he knew the president of france
the taxi driver replied that he didn't
know the president of france
but he did know christian dior
ironically
50 years later the average american
still doesn't know the president of
france
but we all know about christian dior
this exchange showed bernard the
international recognition
of french fashion design and it made him
extremely proud to be french
for a moment he dreamed about running a
french fashion company that was known
around the world
but once again bernard was extremely
practical
and he knew that starting his own
fashion brand would be nearly impossible
so he simply got back to work with his
father after returning to france
over the next couple of years bernard
would convince his father to transition
the company
from being a construction company to
being a real estate company
and as the real estate company grew
bernard would become the company's
president
in 1978 at h-29 after taking lead
bernard would attempt to expand the
company to america in 1981
but these efforts wouldn't last that
long you see
in 1984 the parent company of christian
dior busock went
bankrupt and the french government was
looking for a buyer
at the time bernard was quite wealthy
but he had nowhere near enough money to
buy a large brand
like christian dior he knew that this
may be his only chance to buy the
company though
so he started talking to some bankers
bernard would eventually land on antoine
bernheim from lazard financial services
who agreed to buy up the rest of busock
and let bernard run the company
bernard would end up buying busock for
80 million dollars
out of which he supplied 15 million
dollars and lazarus applied 65 million
as soon as the acquisition went through
bernard got to work
as we previously discussed bernard was
extremely practical
and this required him to make ruthless
decisions bernard didn't really care
about busock
the only reason he bought the company
was to acquire christian dior
so his first order of business was to
revive the other companies owned by
busock
and then sell them he started off by
firing 9 000 employees
and dramatically leaning up the various
businesses he would then flip these
businesses for a total
of 500 million dollars this was
extremely uncharacteristic of french
businessmen
at the time who generally prioritized
empathy over profits
this wasn't necessarily because they
were super nice individuals
they did however care a great deal about
being viewed as empathetic businessmen
bernard didn't really care about
creating such a perception though
and he just ate up all the criticism he
received from the media
one of the most iconic names given to
bernard by the media was
the wolf in the cashmere coat bernard
would just continue on his path though
and his next goal was to complete his
christian dear acquisition
he already bought most of the brand when
he bought busock but
the perfume division of christian dior
had been previously sold to louis
vuitton moe hennessy
so bernard still had to buy back the
perfume division to complete his
acquisition
in order to accomplish this bernard
would befriend the leader of the louis
vuitton brand
at the time the leaders of the two
brands louis vuitton and moe hennessy
were having a major fallout bernard
would side with the louis vuitton boss
to house the leader of boy hennessy
and get himself into the company
eventually
he would turn on the louis vuitton boss
as well making himself the leader
of lvmh he didn't have any equity in the
business though
so building up equity would be his next
target bernard would porn all the money
he made from flipping busocks businesses
and he would garner additional funding
from lawser to buy a significant stake
in lvmh by 1990 bernard was able to take
control
of lvmh let's just keep in mind six
years before this
he was trying to expand a family real
estate company to america
so between 1984 and 1990 bernard went
from a generic real estate businessman
with tens of millions of dollars
to being the ceo of lvmh worth hundreds
of millions of dollars
that's really quite a transition but
bernard was just getting started on his
luxury french empire
over the next few decades bernard simply
went on a buying spree
picking up any and every fashion company
he could get his hands on
some of his most notable purchases
include selena 1996
sephora 1997 bulgaria in 2011
and tiffany and co just earlier this
year today
lvmh owns an impressive 75 different
brands
which are divided into five major
sectors the first sector
is fashion and leather which is
dominated by louis vuitton
the second sector is perfume and
cosmetics and this sector is dominated
by christian dior
the third sector is watches and jewelry
and this sector is dominated by bulgari
the fourth sector is selective retailing
and other and this actress led by
sephora
and finally the last sector is wine and
spirits which is dominated by hennessey
despite the meteoric success bernard has
had his share of major failures
as well such as his attempt to acquire
gucci in 1999
which is known as one of the most bitter
fights in corporate history
in 1999 bruno decided that he wanted to
buy gucci
gucci highly valued their autonomy
though and they weren't looking to be
acquired
so bernard would just go on to the open
stock market and start buying shares of
gucci
he started off small buying just five
percent of the company
the ceo of gucci at the time domenico de
sol was promptly notified of the
purchase
and the seoul instantly knew what this
meant the gucci board would immediately
organize a meeting and they would
discuss the two ways this could play out
either bernard would make an offer to
buy the entire company
or he would continue to buy shares from
the open market until he could force
an acquisition bernard chose to go with
the second option
and he would quickly accumulate a stake
in gucci through the open market
and a private deal in just a couple of
weeks lvmh would up their stake to 26.7
percent
soon after bernard would have a meeting
with desol during which bernard would
ask for three seats on the board
they saw would reject this offer and
bernard would just continue to buy up
more shares of gucci
upping his take to 34.4 percent this
move was
on purpose and was designed to put
massive pressure on taguchi
you see the creative directorate gucci
tom ford
had a contract that allowed him to leave
the company with no penalties
if any one individual were to garner a
35 stake in the company
having no choice the solar would offer
brenda two seats on the board
but bernard would reject this offer
bernard would go on to call a special
meeting with the board members
which he could do because of his large
take in the company
knowing what this would lead to they so
would simply give in and offer lvmh
opportunity to buy the entire company
for 85 per share bernard could have
picked up the company
right then and there but bernard would
decide to show some mercy
and he wouldn't take on the offer
meanwhile they saw would come up with
the last wizard idea that would end up
saving gucci from
lvmh they sold would create an employee
stock ownership plan
this plan entailed diluting all of the
shareholders of gucci
and creating stock that would eventually
be awarded to employees
the creation of the employee stock
ownership plan increased the total
amount
of gucci stock available by 42 and this
subsequently
reduced lvmh's ownership of gucci from
34.4 percent
down to 20 bernard was obviously furious
but he didn't think that he was going to
lose gucci he simply thought that gucci
wanted lvmh to pay a premium to buy the
company
so bernard would start negotiations with
gucci after he would purchase a newly
created stock
but little did burner know that dasol
was actually talking with
friends of penant who is the leader of
the caring group
and the solo would end up selling the 42
stick to the carrying group for 3
billion dollars
after seeing this burn red would become
livid and he would sue to block the deal
lvmh would offer 85 per share to buy the
entire company
and lvmh would argue through the courts
that gucci must consider their offer
the courts would agree that gucci must
consider bernie's offer
but at the same time they didn't have to
take offer
gucci would end up rejecting bernard's
offer and they would choose to sell the
42 percent sake to the caring group for
75 dollars per share
the caring group would go on to buy the
rest of lvmh at 94
per share in october of 2001. both sides
would end up calling the outcome a
victory
gucci was able to avoid being acquired
by lvmh
and lvmh was able to profit 700 million
dollars by flipping the shares to the
curing group
but in reality the caring group was the
only party that won
after all gucci ended up diluting their
shares and still getting acquired
anyway meanwhile lvmh lost out on gucci
throughout the 2000s bernard would
attempt a similar strategy with
hermes but that acquisition wouldn't end
up working
either at the end of the day though
burner did have some sour deals
most of his acquisitions have gone on
without a hitch and this has allowed him
to build
lvmh to be the largest fashion company
in the world and the 18th largest
company
in the world with a market cap of about
400 billion dollars
with a 46.84 stick in lvmh
bernard has successfully built up a
fortune worth just under 200 billion
dollars
today what do you guys think about
burner's vicious series of acquisitions
comment that down below also drop a like
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questions logically answered
but until then i'm hari and i'll see you
guys on the next one
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