Bernard Arnault is a French billionaire businessman and an art collector. He is the Chairman and Chief Executive Officer (CEO) of the world’s largest luxury-goods company, LVMH Moet Hennessy- Louis Vuitton SE. He also serves as the Chairman of the French luxury goods company, Christian Dior SE. Both companies are interconnected as Dior itself holds 42.36% shares of and 59.01% voting rights within LVMH.
Arnault became the richest person in fashion in April 2018. He briefly surpassed Jeff Bezos to become the world’s richest person in December 2019. He again became the world’s richest person for a short period in January 2020. With a net worth of $180.6 billion, Bernard Arnault is the richest man in the world in 2022.
Bernard Arnault – Biography
Name
Bernard Jean Etienne Arnault
Born
5 March 1949
Birthplace
Roubaix, France
Age
73
Nationality
French
Education
Ecole Polytechnique, Palaiseau
Profession
Businessman; Media proprietor; Art Collector
Position
Chairman & CEO at LVMH; Chairman of Christian Dior SE
Net worth
$180.6 billion (Forbes 2022)
Father
Jean Leon Arnault
Mother
Marie-Josephe Savinel
Spouse
Anne Dewavrin (1973-1990); Helene Mercier (since 1991)
Bernard was born in Roubaix, France. His father, Jean Leon Arnault was a manufacturer. His mother, Marie-Joseph Savinel was intrigued by the Dior brand. He married Annie Dewavrin in 1973 and they had two children, Delphine and Antoine. After getting divorced, he married Helene Mercier who was a Canadian concert pianist. They had three children and the family currently lives in Paris, France.
Bernard Arnault – Education
Bernard studied at Lycee Maxence Van Der Meersch in Roubaix. He was later enrolled in Lycee Faidherbe in Lille. He completed his graduation from the leading school of France Ecole Polytechnique in 1971.
Bernard Arnault – Professional Life
Bernard started his professional career after completing his studies. In 1973, he joined his father’s company, Ferret Savinel. He served as the President of the company from 1978-1984. He was a member of the Board of Advisors of the Malaysian 1MDB fund from 2010 to 2013.
He acquired many companies including, Celine, Berluti, Kenzo, Guerlain, and Loewe. He also purchased the French economic newspapers, La Tribune, and Les Echos.
He is a brilliant Investoras well. He had invested in major companies like Zebank, Boo.com, Libertysurf, Netflix, Colony Capital, Carrefour, Princess Yachts, and Royal van Lent. As a Philanthropist, he and his family pledged to donate €200 million for the reconstruction of Notre Dame cathedral after a fire. In 2019, he and his son finalized a donation of €100 million.
Bernard acquired a luxury goods company in 1984 with the help of Lazard Freres. He then became the CEO of the acquired company, Financiere Agache.
Gradually, he took control of the textile company, Boussac Saint-Freres, which owned Christian Dior, Le Bon Marche, Conforama, and Peaudoce. He sold all the company’s assets and kept only the Christian Dior brand and Le Bon Marche department store.
Brand Value of Dior Worldwide from 2016 to 2022
In 2022, the Dior brand was valued approximately at $8.9 billion whereas, the brand’s valuation was roughly $4.6 billion in 2017.
Bernard Arnault – Chairman & CEO of LVMH
Company Name
Moët Hennessy Louis Vuitton (LVMH Group)
Founders
Bernard Arnault, Alain Chevalier, and Henry Racamier
Founded in
June 3, 1987
Headquarters
Paris, France
Industry
Luxury goods
Valuation
$371.47 Bn (2022)
LVMH Homepage
Bernard spent $1.5 billion to establish a holding company with Guinness that had 24% of LVMH’s share. He again provided $600 million to acquire 13.5% more of LVMH and became the largest shareholder of LVMH. Gradually, he acquired 43.5% of LVMH’s shares and 35% of its voting rights. A filing with the French market authority showed the Arnault family owns 47.99% of LVMH and has 63.5% of voting rights in the company.
He was unanimously elected chairman of LVMH on 13 January 1989. He has significantly transformed it into one of the largest luxury groups in the world. Under his leadership, the company’s sales and profit grew by a factor of 5 and 15 times the market value of LVMH.
In 2021, the company had over 175,000 employees from 179 nations and generated $68.54 billion in revenues. It controls 75 prestigious brands and has a retail network of over 5,500 stores worldwide.
LVMH’s revenue was $60.33 billion in the first nine months of 2022, 28% more compared to the same period in 2021. As per Forbes, it had $75.9 billion in revenue in 2022. The organic revenue growth was 20%.
Bernard Arnault – Art Collector
Bernard was a young fashion designer and he used to collect art pieces. His collection includes Picasso, Yves Klien, Henry Moore, and Andy Warhol. His art-collecting habit made LVMH a major patron of art in France. He created an international competition, open to students from fine arts schools. Every year, the winner is bestowed with a grant to support the creation of the designer’s label with a year of mentorship.
He owned an auction house, Philips de Pury & Company from 1998 to 2003. Along with that, he bought the first French auctioneer, Tajan. In 2006, he introduced a project dedicated to the creation and contemporary art. The project was named Louis Vuitton Foundation and its building was inaugurated on 20 October 2014.
On 10 February 2007, he received Commandeur de la Legion d’Honneur
On 14 July 2011, he was conferred with the Grand Officer de la Legion d’Honneur
In 2011, he received the Woodrow Wilson Award for Global Corporate Citizenship
In 2012, he was awarded the Honorary Knight Commander of the Most Excellent Order of the British Empire
In March 2014, he received the Museum of Modern Art‘s David Rockefeller Award
FAQs
Who is Bernard Arnault?
Bernard Arnault is a French billionaire businessman and an art collector. He is the Chairman and Chief Executive Officer (CEO) of the world’s largest luxury-goods company, LVMH Moet Hennessy- Louis Vuitton SE.
What does LVMH stand for?
LVMH stands for Moët Hennessy Louis Vuitton.
Who is the richest French person?
Bernard Arnault is the richest French person and also the richest person in the world with a net worth of $180.6 Bn.
Does Bernard Arnault own Louis Vuitton?
Bernard Arnault has about half of LVMH’s shares and the majority of its voting rights. He has been Chairman and CEO of the company since 1989.
It is super easy to recognise brands. In fact, it is the sole reason why some companies are known as brands. The fact that they are easily recognisable, makes them a big brand. Companies try hard with all sorts to establish themselves as a brand but I kid you not, few of them are actually able to build an empire. Thousands of companies, all around the world survive and die every day, it is just a certain mix of vision and action which makes some of them the success that they seem from a distance.
The cream of the cream is the one that tends to become a super identifiable brand. One of the most identified companies in the world is Nike. The swoosh logo is something that you just cannot ignore, you know it instantly when you see it.
There is a lot of work that has gone behind this brand building. All that work is worth it when we see the current valuation of the company. But here is a trend that we can see in the company. The famous shoe brand is trying to get more surface area in the life of a customer. There are speculations about Nike going to enter the luxury home segment. This article talks about the same. We will check if the news is true and if it is true, then to what extent. Let us get right into this,
We will start off with the topic of branding. Every company in some sense or the other tries to create a persona of a brand. A brand is the perceived perception of a company in people’s minds which helps boost loyalty. Let us define branding in a more formal way and see where the shoe mogul Nike stands in the definition.
Branding refers to the process and all the actions taken thereof in order to create a familiar and trustworthy image of a company. It is creating a strong, valuable and positive perception of a company in the mind of a consumer.
Apart from all the actions and services that the company tries to give to its consumers, There are many more elements that constitute the brand building. Those elements include Logo, statement, design throughout the customer journey, and a reliable omnipresent theme.
People might ask about the function of good branding, which is a legit question. Branding works in creating a persona of the company that stands apart from the rest. This creates an identifiable difference in the market which leads to more people recognising the company. The end goal of which is obviously to increase sales. Thus, branding is a silent salesman.
A Brief About Nike
The company behind the world-famous swoosh logo probably needs no introduction but we will do it for the uninformed. Nike is a sports brand, which specialises in all sorts of sports equipment. The most famous product among all the products is the shoes. They are probably the most famous and most sold shoes ever. The branding of this company is robust and is probably not going to go anywhere in the future.
This sportswear brand takes the branding of its products very seriously. One of the most iconic moments that is often lauded in this company was the partnership with Michael Jordan. The Basketball federation, or the NBA, cancelled the use of Nike shoes (Air Jordans) in the game and imposed a fine of some thousand dollars on it. Guess what Nike did afterwards, they paid the fine imposed on the shoes. This incident advertised the shoes even more and today Air Jordans are the most sold shoes ever. This is one of the many stories which prove the efforts that Nike did for establishing itself as a brand.
They also manage the demand and supply of their goods in such a manner that if you get a pair of shoes, it will feel like a victory for you. They have the hottest sneakers and the company makes it hard to get hands-on with the product from time to time, to induce further demand for the product.
People like to buy things that are not available, this is a good mantra that the brand follows. Making their top products move through shelves is a great demand puller. It pulls the demand by making products harder to find, which in turn makes people want them more. Following this strategy of infusing demand, the sportswear brand has been able to set aspirations of surpassing even the top brands like Louis Vuitton and Gucci.
There is more than just that, Nike is now setting the bar of aspirations higher than ever. They are trying to get out of the line from their product and want to experiment with new forms of market. Keeping in mind the huge demand with which the company operates, increasing market breadth seems to be a good option.
“It’s not like people aren’t spending money on high-priced items,” Business Insider retail analyst Cooper Smith told Complex in a conversation. “It’s just that their preferences for lifestyle and their preferences for fashion are changing.”
In simpler terms, people are willing to pay a premium for things that they really want. If a company can fit into this sweet little spot, where people want their product to great extent, it can earn greater revenue. Apple does it, Nike is the most recurring example in this space. With this advantage, they can also try to be more than just a sportswear brand, they can enter into new and new markets.
Nike can take great advantage of its already built market. It can cross-sell more than just shoes and sports equipment. According to some reports, it is planning to do that sometime. Nike is probably planning to be a fashion house. Let us see what it means to be a fashion house first.
What is a Fashion House?
Fashion is probably the most misunderstood term all over the world. Some people call it art, or a personality statement. Some just dismiss it saying it is a waste of time and money. This problem has always persisted up until now, some call it art and others just dismiss it as something temporary. Whatever may be the verdict of the customers all over the world, it is quite true that companies earn a lot of money from the fashion world. So what does it mean when someone identifies a company as a fashion house?
A fashion house is a one-stop destination for all things fashion. As the name suggests, it is a house of fashion. You can find whatever you need to, in a store of a brand which is identified as a fashion house. It has shoes, apparel and accessories of all sorts. It is a dream for many companies to include a lot of products in their product list. Not everyone can pull this off.
Nike is taking the benefit of its huge fan base. The perception of Nike is no doubt the quality and the pricing that they offer. It already has a lot of shoes and sports materials. They range from being inexpensive to some of the most expensive shoes of all time.
There is Air Monarch is a common Nike that can be seen everywhere and the range goes to HyperAdapt 1.0, which are probably the most expensive shoes from this sports brand. Standing at this intersection of works, Nike can really take advantage of their pedestal. They can go on and then maybe become a fashion house for sure.
Nike’s Plan to Become a Fashion House
Nike has, over the years, managed to create a brand of its name. The famous swoosh logo is now easily recognisable all over the world and this makes this company stand really unique in position.
As of now, there were some speculations about Nike moving to become a more full-fledged fashion house. The company as of now is focusing mainly on shoes and all sorts of sportswear, equipment etc. but watching its current valuation and the amount of influence it has on all over the market can be a big reason for the company moving to become a fashion house. Here we will see how the shoe business has been working over something and what Nike’s relations have been like with the market in which it operates. Starting off with Foot Locker, a marketplace for fashion products.
Nike is Foot Locker’s biggest brand partner. Also, Foot Locker is also one of Nike’s biggest wholesalers. They both have been surviving and thriving on each other’s shoulders. Now the situation has changed and we will be seeing something over here in their relationship.
Foot Locker Store
As we all know that Nike is known to create a vacuum of demand. It simply means that Nike stops the supply of its most demanded shoes to increase and induce more demand, which has not been good for Foot Locker. Foot Locker has recently mentioned that they have lost about a quarter of its market value since the shoewear brand has cut supplies of its most demanded footwear.
Foot Locker said that no single vendor — Nike is its largest supplier — would account for more than 60% of the chain’s total purchases this year, down from 70% in fiscal 2021 and 75% in the year earlier.
The move of Nike to shorten its supplies is not a new thing, it has always existed and retailers are always worried about the demand that the company pulls toward itself. This method or strategy of Nike helps it to control more of its pricing and to become more profitable. This is good for the brand image on a larger level and it makes the company a price maker.
Another reason for Nike to follow the same strategy is that it enables it to sell more via its designed applications and websites. Selling through its own built ways, helps the company to increase sales and thus forge better relations with the customers. This is one reason why Nike tries to sell most shoes on its own and well-built network of distribution channels.
Nike Retail Store
Luxury adviser Mario Ortelli estimates that for multi-billion-dollar luxury brands, direct-to-consumer channels account for more than 90% of sales, on average. For Nike, the share is nearing 40% and could reach 60% by 2025.
It is for sure that Nike will continue to focus on the shoes, which are the star product for the sportswear company. On the other hand, the company is eyeing other opportunities to grow its product line. They want to be more than just a sportswear brand, it is speculated that they want to become a full-fledged fashion house.
In the shoe department, they will always be a fashion retailer as their mainstream work. There will be plenty of limited edition pieces in the future also that will increase the brand value for the company. An increased brand value will foster more partnerships and collaborations with established fashion and luxury houses. Nike has upscaled itself by partnering with luxury fashion brands like Louis Vuitton, Dior, Supreme and Off White.
Nike Collaboration with Supreme and Louis Vuitton
In a recent report, some have also speculated that Nike is also looking forward to buying some established names in other industries as well. For example, it is reported that Nike is eyeing a brand named ‘Peloton’, which is a brand operating in the luxury home fitness space.
Peloton
Foot Locker, which we mentioned earlier has to look out for something to fill the gap that has been created as the Nike inventory has shrunk. This track will take some hard work off Foot Locker as they are the biggest wholesaler for Nike. The other aspect of the problem can be that Foot Locker has an opportunity to shift to another domain. The retailer is getting exclusive access to Reebok’s basketball footwear.
From controlling the demand for their most selling shoes to eyeing companies that are into other luxury products segments, Nike can be seen planning to go more into the luxury segment.
Getting on the ride to maintain its brand value and spreading its wings in all directions of products, it will be good if this fashion retail goes full throttle in the fashion line. Nike has already made one smart move. The current challenge for the company now is to make a more theatrical shift towards becoming a fashion and/or luxury house.
A fashion house is a company that operates its products in a fashion line. A luxury fashion house is a fashion company that operates in the somewhat same segment of fashion products like shoes, bags and accessories etc. However, a luxury fashion house’s products are expensive and are designed for people who want to make a fashion statement and do not mind paying extra for that. There are many benefits of becoming a luxury fashion house, here we list some of them,
More products
A brand that offers the functions of a luxury fashion house, has a lot more products than a brand that is focused on one product line. This helps customers to get more products under one roof, it helps ease the weight of shopping for the customers. As customers go through each aisle of products, the chances of buying more products increase and thus, the profitability.
Previous Goodwill
Brands that are already established have some goodwill attached to themselves. For example, if Apple associates itself with a sound company like ‘Beats by Dre’, then their goodwill will be transferred to the company too. This is one example of how previous goodwill can be transferred to other participating companies and their products. As the goodwill is transferred, revenue is multiplied. In the luxury segment, if someone can transfer their old value to a new venture, it can be a great deal maker for the company.
Trust
This is an extension of the above point. Goodwill when transferred, also transfers the trust that the brand has built in the past. When this happens, when new products work with the same old trusting partnership, it increases customer loyalty. The more a consumer is loyal, the more the business he/she will create for the business.
Conclusion
Nike has always maintained its image as a sportswear brand in the eyes of the public. The swoosh logo is a super identifiable image from the brand, making it different and distinguishable from other brands. The “Just Do It” tagline fits the goal with which the company operates.
Every branding activity just falls in place as the company manages its stock and creates trends. It is very apt to say that Nike is the torchbearer for the sneakerhead culture in and around the world. With this much power to hone, and a future full of opportunities, Nike can be more than just a sportswear brand.
Nike can be a luxury fashion house if it capitalises on the right resources. As per the reports and watchers, the brand has been controlling the supply of its most rated shoes and thus increasing revenue. The company is also said to be eyeing other brands that deal in luxury home items. For example, Peloton, which is a luxury home fitness company, deals in fitness equipment. Nike can take advantage of its current position and leverage from the place where it now stands. The benefits of becoming a fashion house are immense.
An already established brand can benefit from becoming a luxury fashion house, as it will generate more revenue, and there will be benefits and multiplication of goodwill and trust. Nike sits at a leveraged position and can take advantage of that, if done correctly, it will surpass many famous luxury houses.
FAQs
Who is the fashion designer for Nike?
Tinker Hatfield is one of the most popular designers for Nike.
Is Nike turning into a luxury brand?
Yes, with the recent collaborations of the sneaker brand with Louis Vuitton and controlling the supply and demand of its popular sneakers it seems like Nike is becoming the next luxury fashion house.
Ashwini
Ashwini
