There is a battle underway between high fashion and fast fashion at the top of the Forbes food chain. As tariffs and tech continue to subject the market to a rollercoaster of fluctuations, France’s richest man Bernard Arnault, who heads up French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton, has surpassed Inditex owner Amancio Ortega as the fourth richest person on the planet.
After falling from the number-four spot last month, Arnault – who currently holds the title of the wealthiest European with a net worth of $70.7 billion – has regained his position, overtaking Spanish billionaire Amancio Ortega, whose own retail conglomerate owns Zara, Zara Home, Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius and Uterqüe.
The digital footprint of Zara, which is the top money-maker under the Inditex umbrella, surged over the past year, with the fast fashion giant registering a 41 percent leap in online sales for 2017, where it has said it is placing a significant emphasis.
It continues to face slowing sales in its expansive brick-and-mortar network and an influx of competition in the market for trendy, fast-paced apparel and accessories, which was, for years dominated almost entirely by Zara and H&M. Newer names, like ASOS, Boohoo, and Fashion Nova, have taken to churning out new styles in many cases in a fraction of the amount of time as Zara, which “has some major catching up to do with its more agile competitors,” says Florence Allday, a beauty and fashion associate at Euromonitor International.
On the other hand, LVMH – which plays parent to Louis Vuitton, Givenchy, Celine, Christian Dior, and Loewe, among other fashion and non-fashion brands – has been on the up-and-up, welcoming record sales of 42.6 billion euros ($52.78 billion) in 2017, a 13 percent raise over 2016. Positive stock market treatment and the strength of the euro against the dollar has been cited as helping Arnault – who is regularly described as a poised-yet-aggressive business builder – move ahead of Ortega and some of the world’s other richest businessmen.
Rising demand in the Far East is also helping to boost LVMH, which announced late last month that it will open two new factories in France in the near future “in order to meet the growing demand for its leather goods.” The new additions to its manufacturing infrastructure are expected to cut production time down on internal orders to just one week. The group has also very recently announced the culmination of a revamp of a number of its top creative spots, with appointments, such as that of Virgil Abloh, that seem to demonstrate a intent by the luxury goods group to bank on millennial-driven hype to boost its brands’ bottom lines.
And in something of the vein as Zara, LVMH has worked to up the ante in the digital sphere. Last June, LVMH launched its own multi-brand platform, 24 Sèvres, under the direction of former Apple exec Ian Rogers, and has made a point to take some of its most e-commerce averse brands, such as Céline, online, where a total of 20 percent of all luxury sales are set to take place within a decade.
UPDATED (August 30, 2018): Following another bout of stock market fluctuations, Arnault has topped Ortega as the richest man in fashion. Bloomberg reported on Thursday that Zara’s parent company’s stock price and thus, the net worth of its founder, fell the most in six months this week after Morgan Stanley analysts “cut their recommendation [of Inditex] to underweight from equalweight and reduced their price target for the stock to the lowest among analysts tracked by Bloomberg.”