Bernard Arnault Loses Billions, renowned as the world’s wealthiest individual, witnessed an $11.2 billion drop in his fortune in a single day. The reason behind this financial setback stems from mounting worries regarding the weakening US economy, which could potentially dampen the demand for luxury goods.
What Exactly Happened?
As the mastermind behind LVMH, the luxury conglomerate encompassing iconic brands such as Louis Vuitton, Moet & Chandon, and Christian Dior, Arnault enjoyed a surge in wealth throughout 2023, thanks to the soaring share prices of European luxury companies.
However, Tuesday brought a reversal of fortune for Arnault, as LVMH shares plummeted by 5% in Paris—marking the sharpest decline in over a year. This broader slump wiped approximately $30 billion from the European luxury sector.
Bernard Arnault Loses Billions as Softening US Economy Sparks Concerns for Luxury Market;
Still The Wealthiest
Despite this sudden setback, the French billionaire’s net worth still stands at a formidable $191.6 billion, according to the Bloomberg Billionaires Index. In fact, Arnault has managed to amass an additional $29.5 billion in wealth since the beginning of the year.
The gap between Arnault and Elon Musk, the second-richest person globally and CEO of Tesla Inc., has narrowed significantly to just $11.4 billion. This development underscores the substantial impact of the recent financial downturn.
The Market Rout
Tuesday’s market rout arrived following an extensive rally in LVMH’s share price, which had soared by 23% over the course of the year. Meanwhile, the MSCI Europe Textiles Apparel & Luxury Goods Index recorded a remarkable surge of 27%.
At a luxury conference held in Paris, organized by Morgan Stanley, attendees voiced concerns about a “relatively more subdued” performance in the United States. Edouard Aubin, an analyst at the investment bank, shared this sentiment.
Experts from Deutsche Bank AG, Matt Garland, and Adam Cochrane, echoed similar sentiments in a note, expressing their expectations that investors would become more discerning when it comes to European luxury stocks due to concerns over the decelerating growth in the US.
