Bernard Arnault, the world's richest person, lost $11.2 billion on Tuesday. The Bloomberg Billionaires Index showed him losing ground to Elon Musk. The big loss to Arnault's fortune is attributed to the US economy's softening and the action is likely to dampen luxury goods' demand. LVMH, which owns brands such as Louis Vuitton, Moet and Chandon and Christian Dior, experienced a 5 per cent fall in its shares. Despite the slump in shares, Arnault still has a net worth of $191.6 billion, adding $29.5 billion so far this year. In light of slowing US growth, Deutsche Bank analysts forecast that international investors may become selective with European luxury stocks. This might affect the LVMH share price as well.
A surge in European luxury company prices led to a wealth balloon for the founder of LVMH - which includes Louis Vuitton handbags, Moet & Chandon Champagne and Christian Dior gowns.
The decline
On Tuesday, LVMH shares in Paris fell by 5 per cent, the most in more than a year. This came amid a decline that erased about $30 billion from the luxury market. However, the French billionaire still has a worth of $191.6 billion, according to Bloomberg Billionaires Index. He has added $29.5 billion so far this year.
Losing ground to Elon Musk
Bloomberg Billionaires Index has indicated that Bernard Arnault is losing ground to Elon Musk. In recent years, the gap between the fortunes of Arnault and Tesla CEO, the world's second-richest person, has shrunk to just $11.4 billion.
Since Tuesday's rout, the MSCI Europe Textiles Apparel & Luxury Goods Index has surged 27 per cent. After a lengthy rally in LVMH's share price, it went up by 23 per cent in the past year.
As Edouard Aubin, an analyst at Morgan Stanley, pointed out, attendees at its luxury conference in Paris reported “relatively subdued” performances in the US. In January, the 74-year-old billionaire reshuffled top management at his luxury goods empire, appointing his daughter Delphine to lead Christian Dior. He also appointed another boss for Louis Vuitton.
Notably, in December last year, the Bloomberg Billionaires Index listed Arnault as the top billionaire for the first time. While his fortune surpassed that of Elon Musk, Arnault has maintained that position ever since.
