On Thursday, Bernard Arnault began his day grappling with a staggering loss of wealth, having experienced a decline greater than that of any other billionaire this year. His fortune connected to luxury goods has plummeted by an astounding $24 billion.
However, a significant shift occurred when China’s top leaders announced strong stimulus measures aimed at revitalizing the world’s second-largest economy. This development breathed new life into the French business magnate’s financial outlook.
In an impressive turnaround, Arnault saw his net worth increase by $17 billion in a single day, bringing his total to $201 billion. This surge marks the third-largest one-day gain in his financial history, as highlighted by the Bloomberg Billionaires Index. The shares of his luxury giant, LVMH, surged by 9.9 percent after the market reacted positively to the anticipated effects of the stimulus, sparking hopes that consumer demand for luxury goods in China would be rejuvenated.
At 75 years of age, Arnault now holds the position of the fourth-richest individual globally, with the vast majority of his wealth closely tied to his impressive 48 percent stake in LVMH. Despite this recent surge, share prices in LVMH have experienced a decline of 7.5 percent since the beginning of the year, primarily due to disappointing demand from China and cautious spending behaviors among consumers, both of which have negatively impacted the company’s earnings.
The signals from Chinese officials on Thursday were clear; there is a concerted effort to boost economic growth, including promises to bolster fiscal spending and stabilize the struggling real estate sector. This indicates a potentially positive shift for consumer confidence in what has been a weak market environment.
In 2023, Asia represented 38 percent of LVMH’s overall sales, and China accounted for a significant portion of that figure, highlighting the critical importance of the Chinese market to the luxury goods sector.
Arnault is not alone in his good fortune stemming from China’s stimulative policies. Colin Huang, the founder of PDD Holdings Inc., who recently lost his status as China’s richest person, also benefited from this market momentum. Huang added $5 billion to his net worth on Thursday as shares of his e-commerce company surged by 14 percent.
This article was crafted by Diana Li from Bloomberg and has been legally licensed through the DiveMarketplace by Industry Dive.
LVMH is part of a collective of investors who hold a minority stake in The Business of Fashion. All investors have completed shareholder documentation that guarantees the editorial independence of BoF.
