Arnault Tightens His LVMH Control With $1.6 Billion Buying Spree

French billionaire Bernard Arnault increases control in LVMH. In silence, the founder has bought shares in the luxury conglomerate worth 1.5 billion EUR.
​According to Bloomberg, French billionaire Bernard Arnault has long strived to strengthen his ownership in LVMH, the luxury conglomerate that he founded almost four decades ago. Now it turns out that Arnault, who is both CEO and chairman of the board, according to documents filed with the Paris Stock Exchange. The purchases have been made via holding companies and have coincided with LVMH's share price crash during the year. The stock has been under heavy pressure after several weak quarterly reports, where luxury consumers have failed and the important Chinese market has been under economic pressure. - Luxury stocks rise and fall with demand, especially those with exposure to the aspiring middle class. After Covid, we saw a few years of super-consumption where people were euphoric and thought they would rather spend money than die rich, but now people are sobering up, where the cost of living and inflation are taking their toll, Luca Solca, head of the luxury goods sector at Bernstein in London, told EFN a few weeks ago. "Strong conviction" LVMH released its report on October 15, which caused the stock to surge twelve percent on Wednesday after unexpectedly showing a return to growth in the third quarter.

According to Bloomberg, Arnault has paid an average of about 566 euros per share, and as low as 448 euros in June, compared with a closing price of 612 euros on Friday. So far this year, Arnault has bought about 2.5 million LVMH shares, equivalent to about 0.5 percent of the company. “What is remarkable is that Bernard Arnault has such a strong conviction about LVMH,” Frédéric Genevrier, an analyst at AlphaValue, told Bloomberg. He believes that the purchases may reflect Arnault’s desire to own an “absolute majority” of the company, even though he already controls almost two-thirds of the voting rights. Arnault’s fortune amounts to $195 billion, according to the Bloomberg Billionaires Index. His stake in LVMH, which constitutes the largest part of his personal assets, amounted to 49 percent of the capital and close to 65 percent of the votes at the end of last year.v