While the deadly coronavirus has affected nearly 212 countries and territories globally, Europe’s wealthiest man, Bernard Arnault, who is the owner of Louis Vuitton (LVMH), has lost more money than anyone in the world. According to an international media outlet, Arnault’s wealth has plunged as the LVMH shares are down 19 per cent this year. His worth has reportedly shrunk by more than $30 million.
Arnault has been fighting to keep a blockbuster acquisition and a couple of pharaonic real estate projects on track. He has also been holding video calls with deputies as they prepare to reopen factories and boutiques in a virus-shaken world. While speaking to an international media outlet, Mario Ortelli, founding partner of Ortelli & Co. in London, said that the tycoon has been putting himself in a position to keep taking share once the market gets back to growth.
According to the media outlet, Arnault’s flagship Louis Vuitton brand is estimated by analysts to have a profit margin as high as 45 per cent. Whether people buy a Fendi bag or Bulgari watch, Arnault’s wealth is still, however, being fuelled. Although with majority of countries under lockdown and strict social distancing his fashion boutiques around the world have been shut for more than a month now, leading to billions in missed revenue in his most profitable division.
Amid the ongoing crisis, Arnault is reportedly on the hook to pay $16 billion for Tiffany & Co. in what was billed as the luxury industry’s biggest-ever acquisition. Louis Vuitton has also pushed back at any suggestion that it would walk away from the deal or renegotiate the price after the US jeweller’s business similarly stalled. Ortelli reportedly said that the COVID-19 outbreak is a ‘perfect storm’ for luxury. He added that the pandemic has led to the contraction in GDP along with an increase in uncertainty.
Even though Arnault’s worth has shrunk drastically, the LVMH is reportedly still sticking to its plan to reopen the Samaritaine department store in Paris as a duty-free shopping hub and luxury hotel. The construction has also resumed with the $1 billion dollar project. Furthermore, the company also plans to build a Cheval Blanc luxury hotel on Los Angeles’ Rodeo Drive. As per reports, LVMH is close to hitting its steepest-ever decline and it is also expected that Arnault could make deep cuts.