Cooling consumer demand has led to luxury goods tycoon Bernard Arnault – once the world’s richest man – now losing his status as the world’s second-richest man.
The chief executive of LVMH will be familiar with his second successor, Jeff Bezos, the billionaire founder of online giant Amazon.
According to the Bloomberg Billionaires Index, Arnold, who manages Tiffany, Christian Dior, Fendi, Givenchy and other brands, has seen his wealth shrink by nearly $7 billion this year.
The 74-year-old entrepreneur, once the world’s richest man, has seen his wealth increase even in the past few days, with the Bloomberg Index surging by $1.6 billion between October 15 and 16.
However, the growth wasn’t enough to defend former Amazon CEO Bezos’ title.
Index shows Arnold is now Valued at approximately US$155 billionhe has been surpassed Bezos’ revenue increased by about $1 billion.
In 2023 alone, Bezos’ wealth increased by more than $43 billion, and on October 15, his wealth increased by $2.6 billion, jumping to second place on Bloomberg’s list.
Bezos has been buoyed by gains in his biggest asset: Amazon stock.
Bezos owns about 12% of the company, worth $1.37 trillion, which means any stock price risesThe jump from $129 on Friday to just under $134 on Monday had a huge impact on his personal wealth.
Arnold’s problem
Slipping from second to third place on the Billionaires Index is a far cry from reality—in fact, Arnold’s personal net worth still exceeds Morocco’s entire economy.
However, Arnold may be in for a headache as luxury consumers begin to crumble under the pressure of global fiscal austerity and economic headwinds.
LVMH third quarter financial report, Published on October 10it has been confirmed that consumers are no longer addicted to luxury goods – especially in the United States and Arnold’s home country of Europe.
During the period, the group’s sales grew 9% to 19.9 billion euros ($21.1 billion), well below the 17% growth reported in the previous quarter.
Jean-Jacques Guiony, LVMH’s chief financial officer, said: “After three great and glorious years, growth is moving towards figures more in line with historical averages.” tell analysts.
Guiony’s warning echoes that of Citigroup Chief Executive Jane Fraser, who warned that consumers – at least at the low end – were starting to have problems.
While Fraser is optimistic about consumers’ health, she also warns that the toughest times may be ahead.
Fraser told CNBC that history “has given everyone pause,” outlining that the second half of past economic transitions — such as the Fed’s deliberate push to lower inflation with higher interest rates — was the “tougher half.” .
“We’re now starting to see the economy do some work for the Fed,” Fraser added. “So things are definitely slowing down and if we start to see another couple of sets of data in the next few weeks, then I think that will make the Fed’s job easier.”
Amazon and the Big Seven
Unlike LVMH, Amazon has not been affected by the economic transformation. The online retailer’s latest quarter was its strongest since the fourth quarter of 2020, when pandemic-hit shoppers turned to online shopping during lockdowns.
Amazon CEO Andy Jassy reported the numbers on an August conference call far exceeded analysts’ expectations: Revenues were $134.4 billion and earnings per share climbed to 65 cents, instead of the 35 cents expected.
“We are encouraged by the progress we have made on several key priorities, namely reducing service costs for our store business, continuing to innovate and improve our various customer experiences, and building new customer experiences that can meaningfully change what is possible for the long term. Customers who engage with our business,” Jassy told analysts on conference callsuggesting his tough cost-cutting measures are starting to bear fruit.
Wall Street analysts are divided over whether the market, led by the so-called “Big Seven” stocks of Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Tesla and Meta, has gotten too close to the sun.
But while analysts at JPMorgan warned the market could fall, Morgan Stanley’s Andrew Slimmon believes the Big Seven could move higher.
“One thing I will point out, and I know this is hard to believe, is that even though these companies have performed very well so far, they are still below where they will end 2021, with Nvidia being the exception,” Slimmon told Street signs from CNBC in August.
“It’s easy to be bearish on companies that are doing well, but for companies with improving fundamentals, thinking those stocks have peaked, to me, is just as naive or dangerous as trying to judge stocks with worsening fundamentals that have bottomed.”
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