The Finest of Everything
Forbes estimates Bernard Arnault and his family are worth a whopping $29 billion. Arnault took a $15 million investment in 1984 in Boussac, the parent company of Christian Dior, and parlayed that into a 46% equity stake (63% of votes) in LVMH (LVMUY), one of the world’s biggest producers of luxury brands.
The “LV” of course stands for Louis Vuitton and the “MH” is short for Moët Hennessey, a combination of Moët & Chandon champagne and Hennessy cognac. Add Belvedere vodka, Fendi, Christian Dior, TAG Heuer, Sephora and many other fine brands to the mix, and you have all you need to survive amongst the jet set.
Even though LVMH owns some great brands, investors only care about stock performance. Arnault has done supremely well, achieving an annualized return of 14.2% for LVMH — 610 basis points greater than the S&P 500. As far as the board goes, Bernard Arnault is the chairman and CEO, while his son and daughter also serve on the 17-person board.
LVMH is just one more example of a family-controlled business that’s able to balance family ties with good old-fashioned performance.