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Bernard Arnault, the world’s richest person, was nicknamed the ‘wolf in cashmere’ by rivals because of his predatory takeover moves. His company just hit a $500 billion valuation.

Bernard ArnaultBernard Arnault is CEO of LVMH and worth more than $200 billion.

Tefano Rellandini/Getty Images

  • Bernard Arnault is head of luxury giant LVMH and the world’s richest person worth $206 billion.
  • He earned the nickname the “wolf in cashmere” because of his ruthless moves to acquire rivals.
  • The LVMH group owns 75 luxury brands including Dior, Bulgari, Givenchy, and Loewe.  

Bernard Arnault, the world’s richest person, is known for his ruthless takeover moves – so much so that the LVMH boss was once nicknamed the “wolf in cashmere” by a rival firm because of his predatory pursuit to acquire their brand.

This moniker has stuck and Arnault’s battle to the top – and a net worth of just over $200 billion – has been intrinsically linked to his ability to “stalk” and then “swallow up” luxury brands.

It’s enabled him to create the world’s largest luxury conglomerate, which was valued at $500 billion this week. It’s the first time a European company has reached such a lofty valuation and left LVMH rivalling Tesla and Meta in terms of market cap. 

“Arnault is a man of great vision,” Pierre Mallevays, former head of acquisitions at LVMH, previously told The Guardian. “He did not invent luxury brands, but he invented the luxury industry.”

Arnault’s reputation for ruthless takeovers began when he took control of LVMH in 1989. At that point, LVMH consisted of a merger between Louis Vuitton, the luggage maker, and champagne house Moët Hennessy. It was described as a hostile takeover at the time, though Arnault has since denied this. 

louis vuitton suitcaseA Louis Vuitton suitcase with its distinctive pattern.

Louis Vuitton

In the years that followed, he continued to buy up brands and grow his empire to 75 houses, including Dior, Bulgari, Givenchy, and Loewe. 

But his acquisition targets haven’t always been successful. 

It was during his pursuit of Hermès International that he earned the nickname of the “wolf in cashmere.”

Hermès is known for its expensive – and highly exclusive – Birkin and Kelly handbags, which have fetched as much as $500,000 on the resale market and are seen as one of the ultimate status symbols.

These bags are often considered investments. They’ve outperformed both the stock market and gold in recent years, and the company had proven to be resilient in economic downturns – making this an enticing target for Arnault. 

But Hermès didn’t want to sell, and relations between the two soured in the early 2010s when LVMH announced that it had secretly acquired a 20% stake in Hermès through its subsidiaries and via equity swaps.

Hermes BirkinAn Hermès Birkin handbag can sell for hundreds of thousands of dollars.

Rally

WWD reported that at a press conference at the time, Hermès International’s then-CEO, Patrick Thomas, wasn’t shy in sharing his sentiments about Arnault’s moves. “If you want to seduce a beautiful woman, you don’t start by raping her from behind,” he reportedly said.

Vogue reported at the time that Hermès could not be reached at the time of publishing and that LVMH had no comment to make. 

Still, there’s no guarantee that Arnault won’t have his way eventually. At the time, an unnamed LVMH source told The Guardian that Arnault was happy to play the long game. “He will wait it out, even if it takes a generation or two. That’s what he’s like,” the source said.

In 2001, Arnault lost out to arch-rival François Pinault, CEO and founder of French luxury group Kering, in a two-year legal battle for Gucci.

This very public rivalry continued in the years that followed and made headlines again in April 2019 when Pinault pledged 100 million euros, or $110 million, to help rebuild Notre Dame Cathedral after a huge fire damaged the roof and spire. His pledge was promptly trumped by Arnault with the promise of a 200 million euro donation.

Later on in 2019, an Financial Times journalist asked Arnault over lunch whether he still mourned the missed opportunity to buy Gucci all those years back. “I hate the past. What interests me is the future,” he responded, with a deadpan expression.

Read the original article on Business Insider