How did Bernard Arnault make his money?

Tech tycoon, Elon Musk dethroned the French businessman from the top spot after shares of the latter’s LVMH tumbled by 2.6% on Wednesday.

Meanwhile, Musk the owner of Tesla and Twitter, saw his wealth jump 40.3% this year after shares of the electric car maker rose by about 24% in May.

According to a Bloomberg Billionaires tally, Musk’s net worth is now about $192 billion, compared to Arnault’s $187 billion.

The two have been playing a game of tug-of-war for the title of world’s richest person for over a year now, so Musk—who lost the prime position in very similar circumstances back in December 2022 when Tesla’s share price dropped—shouldn’t sit too comfortably.

Earlier this year in April, Arnault, saw his fortune surpass $200 billion for the first time before losing more than $11 billion in a single day the following month due to a shareprice bloodbath. 

But for the average person—who earns less than £40,000 in the UK or around $60,000 in the U.S—the current small dip in Arnault’s fortune, is more money than they’ll see in a lifetime. 

So how exactly did he become so rich in the first place? 

An early taste for entrepreneurialism

In 1971, Arnault kick-started his career by working at his father’s real estate company, where he proved he had an entrepreneurial mind from a young age: A 25-year-old Arnault convinced his father to sell the construction side of the business and shift its focus to property. 

He then traveled to the States in the hopes of growing his father’s empire there but instead was inspired by a taxi driver (who knew French couture, but not the French president) to go back home and forge a name for himself in the luxury sector.

This is where Arnault’s big break becomes a big mystery.

Some reports claim that the then 35-year-old businessman used $15 million from the family business to buy the failing luxury goods company that owned the fashion brand Christian Dior, Boussac Saint-Frères, in 1984.

Strangely, other reports claim that he acquired the near-bankrupt textile company for a ceremonious one franc. 

However much he paid, Arnault took control of Boussac along with all of its assets—including Christian Dior, the department store Le Bon Marché, the retail shop Conforama, and the nappy manufacturer Peaudouce.

Fortune has reached out to LVMH to clarify the mysterious circumstances surrounding Dior’s acquisition —which now controls 41.4% of LVMH.

Arnault “the Terminator”

Following Arnault’s buyout of Boussac, the billionaire fired 9,000 people working for the company, sold off most of the group’s assets (except the Dior brand), and earned the nickname “the Terminator.”

But his tough approach worked: By 1987, the company started making profits, reportedly generating $112 million in earnings from a revenue stream of $1.9 billion.

He then set his eyes on Dior’s perfume division, which had been sold to Louis Vuitton Moët Hennessy.

It was then that a series of hostile takeovers and bold moves at the luxury powerhouse began—and saw Arnault come up on top. 

But first, let’s rewind to the birth of LVMH: In 1987 Henry Racamier, president of Louis Vuitton and Alain Chevalier, CEO of Moët Hennessy, teamed up to form the luxury group Louis Vuitton Moët Hennessy.

Within months of the merger Racamier and Chevalier fell out, so by the summer of 89, Racamier invited Arnault to invest in LVMH and help oust Moët’s chief.

But after tackling the first order of business, Arnault ousted Racamier too (from his own family business, no less). He spent $2.6 billion buying up shares in order to become the company’s largest shareholder and eventually became its chairman and CEO by 1989.

In the years that followed, he continued to buy brands to bring them into the fold, and even secretly acquired a 20% stake in Hermès through its subsidiaries and via equity swaps.

LVMH’s success

Today, LVMH has some 75 luxury brands in its portfolio and, under Arnault’s leadership, has grown to become the largest company (by market capitalization) in Europe.

Just last month, the Paris-headquartered conglomerate became the first European company ever to cross $500 billion in market valuation.

Its success directly impacts the wallet of Arnault, whose wealth is largely tied to LVMH’s shares, including a 97.5% stake in Dior.

And the 74-year-old businessman shows no signs of reining it in.

Although his five ultrawealthy children—all of whom hold senior roles at LVMH brands—are vying to one day take over, LVMH recently hiked its age limit for chief executives from 75 to 80. 

Really, he’s “just getting started”. Reportedly, without a shred of irony, Arnault told the FT, “We’re still small… We are number one, but we can go further.”