World’s richest man loses $15 billion in one day after LVMH stock rout
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Mr Bernard Arnault, founder of LVMH, had US$11.2 billion wiped from his fortune in one day.
PHOTO: REUTERS
New York - Mr Bernard Arnault, the world’s richest person, had US$11.2 billion (S$15 billion) wiped from his fortune in one day over concerns that a softening US economy will dampen demand for luxury goods.
The founder of LVMH – whose offerings include Louis Vuitton handbags, Moet & Chandon Champagne and Christian Dior gowns – had seen his wealth balloon for most of 2023 as share prices of European luxury companies surged.
On Tuesday, he gave back some of those gains. LVMH shares fell 5 per cent in Paris – the most in more than a year – amid a broader decline that erased about US$30 billion from the European luxury sector.
Even with the sell-off, the French billionaire still has a net worth of US$191.6 billion, according to the Bloomberg Billionaires Index. He has added US$29.5 billion so far in 2023.
The gap between the fortunes of Mr Arnault and Tesla’s Mr Elon Musk, the world’s second-richest person, has shrunk to US$11.4 billion.
Tuesday’s rout came after a lengthy rally in LVMH’s share price, which is still up 23 per cent for 2023. The MSCI Europe Textiles Apparel and Luxury Goods Index has surged 27 per cent.
Valuations of luxury groups have largely depended on two things: China’s post-Covid-19 recovery continuing apace and a soft landing in the United States luxury market. At least one of those is in doubt.
Mr Johann Rupert, chairman of Cartier-owner Richemont, earlier in May confirmed that the US market had been slowing since November.
Then, last week, Burberry Group reported a 7 per cent decline in Americas sales in its most recent quarter, weaker than rivals. While the super rich continue to spend, Burberry chief executive Jonathan Akeroyd said younger, more aspirational US consumers were cutting back on purchases of sneakers, hats and belts.
Attendees at a luxury conference organised by Morgan Stanley in Paris on Tuesday flagged a “relatively more subdued” performance in the US, according to Mr Edouard Aubin, an analyst at the investment bank.
Deutsche Bank analysts Matt Garland and Adam Cochrane said in a note that they expect investors to become more selective with European luxury stocks, with slowing growth in the US a concern. BLOOMBERG
