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CULTURE

Who is France’s luxury emperor Bernard Arnault?

Bernard Arnault -- who with his family now tops the wealth of Elon Musk -- gradually built LVMH into a global luxury empire by buying up iconic brands, sealing his reputation as a formidable and insatiable businessman.

French luxury group LVMH Chairman and Chief Executive Bernard Arnault
French luxury group LVMH Chairman and Chief Executive Bernard Arnault currently has the world's highest fortune with 186 billion dollars, topping the Forbes billionaires' list. (Photo by Eric PIERMONT / AFP)

With $184 billion on Thursday, the 73-year-old Frenchman and his family moved to the top of Forbes’ billionaire list, knocking the Tesla, SpaceX and Twitter boss off the top spot.

LVMH — the world’s leading luxury group — boasts more than 75 brands, acquired over time.

They include some of the most recognisable names in fashion and prestige goods, from Louis Vuitton and Kenzo to Moet Hennessy and Tiffany.

“An essential quality in our family is patience,” Arnault acknowledged in a 2012 TV profile of him.

A decade later — by which time LVMH’s annual sales had more than doubled to over 64 billion euros ($68 billion) — he told France’s Radio Classique:

“We can continue to progress — but let’s be patient.

(From L) Elon Musk as he attends TIME Person of the Year in New York City and CEO of LVMH Bernard Arnault as he poses during a photo session in Paris in 2017. Arnault, and his family knocked Elon Musk off the top spot of the Forbes list of the world’s richest people on December 7, 2022. (Photo by Theo Wargo and JOEL SAGET / various sources / AFP)

“No rush,” he said.

The businessman has also invested in the French media, a move he described during a Senate hearing in January 2022 as “more on the patronage side”.

During a hearing in the French Senate earlier this year Arnault said he had intervened to stop LVMH advertising in the Liberation newspaper, after it irked him with a front-page article.

‘Invest in something promising’

Arnault was born in the northern French city of Roubaix on March 5, 1949 and joined his father’s public works building company at the age of 22.

He had just left the elite Ecole Polytechnique and convinced his father to transform the construction business into real-estate development instead.

In 1981, after socialist Francois Mitterrand was elected president, Arnault left France for the United States.

On his return three years later, he bought the debt-ridden textiles company Boussac, prevailing against several serious competitors with a promise to save jobs.

However, he embarked on a drastic reorganisation of the firm, only retaining some of its businesses, including the fashion house Christian Dior.

By then, Arnault was 35 years old.

“My father was surprised when I went to see him saying: ‘We’re going to redirect the family group and try to invest in something more promising, Christian Dior’,” the businessman recalled recently on Radio Classique.

It would be the foundation stone for his luxury empire.

LVMH was born out of the merger in 1987 of trunk-maker Louis Vuitton and the wines and spirits group Moet Hennessy.

Rivalry between the families owning the two companies aided Arnault’s ascendancy and he took control of the group in 1989 after no fewer than 17 legal proceedings.

“He’s a tough negotiator but unmatched, a visionary who knows how to surround himself with good people and who in the end always gets his way one way or another,” Arnaud Cadart, portfolio manager at financial services firm Flornoy, told AFP.

Arnault’s rise, however, has not been without some failures.

In this file photo taken on September 21, 2021 Head of LVMH luxury group, Bernard Arnault (C), his daughter Louis Vuitton Executive vice president Delphine Arnault (L) and his son LVMH Communications head Antoine Arnault (R) arrive to open the exhibition of ‘The Morozov Collection, Icons of Modern Art’ at Fondation Louis Vuitton in Paris. (Photo by Yoan VALAT / POOL / AFP)
Corporate criticisms

He lost Italian fashion and leather goods house Gucci to his French rival Francois Pinault, head of the PPR group, in 1999.

Arnault also tried in vain to take over Hermes, known for its silk scarves and leather handbags, by secretly building up a stake in the firm.

He rarely speaks publicly and does not like the limelight.

When the use of private jets by celebrities was being tracked on social media earlier this year, Arnault sold the LVMH jet.

“The upshot now is that no one else can know where I’m going because I lease planes,” he said on Radio Classique.

“It’s the French businessman’s lot to embody — sometimes in a totally unjustified way — the criticisms of the day since the mindset has for a few years now been a bit anti-corporate,” he lamented on France 2 in 2016.

That same year he was skewered in a satirical documentary entitled “Merci Patron!” (Thank you Boss!) by filmmaker and now politician Francois Ruffin, who often has Arnault in his crosshairs.

Obama, Putin, Trump, Macron… 

Last year, LVMH paid a 10-million-euro fine to settle a case as part of a probe into spying.

Arnault abandoned his bid to secure Belgian nationality in 2013 issuing a mea culpa after it whipped up a storm of controversy which rumbled on for months amid public debate over the tax arrangements of the wealthy.

In 2011, he was received at the White House by president Barack Obama; Russian President Vladimir Putin welcomed him to Moscow five years later; former French president Francois Hollande cut the ribbon on his Louis Vuitton Foundation, while Donald Trump did the same for a Vuitton workshop in Texas.

And when the historic Samaritaine department store, owned by LVMH, reopened last year, French President Emmanuel Macron was a guest at the inauguration.

In Japan, China and the Middle East, the luxury mogul has access to top leaders.

Arnault has five children, all of whom work for LVMH, but shows little sign of slowing down — or handing over the reins just yet.

Every week he makes a point of touring all the group’s Paris-based companies.

At its last general meeting, the age limit for his role as LVMH chief executive was extended to 80 years old, ensuring the luxury conglomerate stays in family hands.

Married to a pianist and art lover, Arnault also created the Louis Vuitton Foundation, one of Paris’ most prestigious exhibition locations for contemporary art.

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COST OF LIVING

What is considered a good salary in Paris?

The higher-paying jobs are heavily concentrated in the French capital, but set against that is the high cost of living - especially the cost of renting or buying a home. So what is considered a 'high-earner' in Paris?

What is considered a good salary in Paris?

Centrist Renaissance candidate Sylvain Maillard, running for re-election in France’s snap parliamentary elections, was trying to highlight the high cost of living in the capital in a debate on RMC Radio 

“You have extremely expensive rents [in Paris], between €1,500 and €1,700, and then there are all the charges and taxes to pay,” he said.

But what most people seized on was his comment that anyone earning €4,000 a month after tax would not be considered rich in Paris – he predictably was accused of being out of touch with French people’s lives.

There’s no doubt that €4,000 a month is good salary that most people would be happy with – but how much do you need to earn to be considered ‘rich’ in Paris?

National averages

Earlier this year, the independent Observatoire des Inégalités calculated poverty and wealth levels in France.

READ ALSO How much money do you need to be considered rich in France?

According to its calculations, to be considered ‘rich’ in France, a single person with no dependants needs to earn more than €3,860 per month, after taxes and social charges. Around eight percent of single workers have this sum deposited into their bank balance every month, it said.

A total of 23 percent of workers take home €3,000 or more every month, while the top 10 percent clear €4,170. 

To be in the top one percent of earners in France in 2024, one person must bring in at least €10,000 per month. After taxes and social charges.

The median income – the median is the ‘middle value’ of a range of totals – of tax households in mainland France is €1,923 per month after taxes and social charges, according to INSEE 2021 data, which means that a ‘rich’ person earns about twice as much as a person on the median income, according to the Observatoire.

Paris situation

About 75 percent of people living in Paris earn less than €4,458 per month, according to Insee data – so according to those calculations, 25 percent of Parisians earn the equivalent of the top 10 percent in France. 

But that city-wide average still hides a wide degree of variation. In the sixth arrondissement, the median income is €4,358 per month, after tax. In the seventh, it’s €4,255.  Further out, those bringing home €4,600 a month in the 19th and 20th arrondissements are among the top 10 percent in wealth terms.

But still, the median income in Paris is €2,639, significantly higher than the €1,923 France-wide median.

That would mean – using the Observatoire des Inégalités’ starting point for wealth – that a Paris resident, living on their own, would have to bring home €5,278 per month to be considered ‘rich’. 

France is a heavily centralised country, with many of the highest-paying industries concentrated within the capital, meaning there is much more opportunity to secure a high-wage job if you live in Paris.

Cost of living

Even these figures should all be taken with a pinch of salt because of the relatively high cost of living in the capital, compared to elsewhere in France. Paris is objectively an expensive place to call home.

In 2023, France Stratégie published a report on the disposable income of French households, after housing, food and transport costs were deducted. It found that, on average, people living in the Paris region had more left to spend, due to higher incomes and despite the fact that housing costs more.

It’s the income paradox in action. A person with a take-home salary of €4,000 per month has more money to spend if they live and work outside Paris. But they’re much more likely to earn that much if they live and work in Paris, where it’s not as valuable. 

Someone who earns a ‘rich-level’ salary in Paris might not appear rich – because they live in an expensive area, and a surrounded by very wealthy people in property that’s out of reach all-but the fattest of wallets. But they’re still earning more than twice the median income in France.

And that’s what Sylvain Maillard was getting at, clumsily as he may have expressed it.

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