Bernard Arnault has been dubbed the Olympics' godfather. Here's how he built LVMH's fortune

PARIS (AP) — For decades, France’s LVMH has been the face of luxury for the wealthy who tote Louis Vuitton bags, don Christian Dior clothing, spritz Bulgari perfume and sip Veuve Clicquot Champagne.

This week, the world's dominant luxury group — home to 75 high-end brands across fashion, jewelry, watches and alcohol — will be the face of a global event for the masses: the Paris Olympics, with its billions of viewers around the planet.

With a major sponsorship role aimed at burnishing the image of the Games and the French capital, it's a new chapter in LVMH's specialty of selling exclusivity at a grand scale under its chair and CEO, Bernard Arnault.

Assembling and growing dozens of exclusive labels under one powerhouse roof has put Arnault, 75, at the very top of Forbes’ list of the world’s richest people. As recently as June 3, Forbes estimated his wealth at $207 billion, narrowly ahead of Tesla’s Elon Musk and Amazon founder Jeff Bezos. With ever-shifting stock-market prices, the three men often trade places (according to Forbes' real-time billionaires list on Tuesday, Arnault and his family are currently No. 3).

LVMH's cosmetics brand Sephora sponsored the Olympic torch relay. Berluti designed France's opening ceremony uniforms. Jeweler Chaumet crafted the Olympic medals. Those will rest in cases designed by Louis Vuitton, whose headquarters at 2 Rue Pont Neuf will be hard to miss as the opening ceremony parade floats by on the Seine River.

“We tried to find a way to do it, to do something else than just signing a check and getting billboards on the side of the streets,” Antoine Arnault — LVMH's head of environment and image and Arnault's eldest son — told The Associated Press on Monday.

The extent of LVMH’s involvement is “unprecedented for a luxury brand,” says Luca Solca, luxury goods analyst at research firm Bernstein. Where such brands used to focus on athletic pursuits more associated with the rich — tennis, equestrian sports and yacht racing — LVMH and its competitors have increasingly used mass sports to reach customers and place a halo of excellence around their products.

“The prize is a high-level association to sports as a universal language that all consumers understand,” Solca says.

While his brands will be front and center, Arnault’s low-key public profile is a sharp contrast with those of Musk and Bezos. Although his company is adept at digital marketing, he’s not on social media himself. He can almost blend into the crowd, sitting quietly in his somber suits in the front row at fashion shows. Unsurprisingly, though, he’s well connected: He received the Légion d’Honneur in March from President Emmanuel Macron, whose wife, Brigitte, taught French to two of Arnault’s sons.

“He is almost like a head of state; he has that level of influence,” says political image consultant Frank Tapiro, dubbing Arnault the “godfather of the Olympics.” Tapiro, who worked with Arnault as creative director for the launch of the Miss Dior perfume, likened him to Louis XIV, the 18th century Sun King famed for wielding incredible power over his capital from afar.

An engineer who started out at his family’s construction firm, Arnault launched his career in luxury by taking over Financière Agache in 1984. He dumped his acquisition’s less attractive businesses, keeping only the crown jewels: Christian Dior and ritzy department store Le Bon Marché. Within five years, he had taken a stake in LVMH and become CEO of the company, born from the merger of Moët Hennessy and Louis Vuitton — brands established centuries before.

Arnault made his fortune by defying conventional wisdom, building a conglomerate in a field where rarity and exclusivity are watchwords. The company’s sheer size has created what Solca calls the “mega-brand virtuous cycle”: Its size and large profits let LVMH recruit top design talent, open bigger and flashier stores in elite locations, and support its brands with marketing and advertising spending that each brand could never attain on its own. That boosts profits further and the cycle repeats.

LVMH today is three times the size it was in 2009. Last year, it reported 86.2 billion euros ($93.2 billion) in revenue and 22.8 billion euros ($24.6 billion) in profit from recurring operations, for a more than 26.5% profit margin — one that businesses in sectors such as automobiles, airlines or food retail can only dream of. It's a public company, but family-run. Arnault’s five children each play roles, leading to media speculation about who will succeed him at the top; however, his move to extend the retirement age for his job from 75 to 80 indicates he could be around for a while yet.

Arnault's forte is balancing heritage with innovation to keep venerable brands from stagnating and giving top designers the freedom to update the classics. Louis Vuitton boosted its aura of exclusivity by multiplying handbag styles through limited editions, with partners like artist Jeff Koons, allowing buyers to feel they have something different from the pack — an approach Solca termed a “multi-pronged innovation engine” that keeps quantities limited and prices high.

“Mastering the paradox of star brands is very difficult and rare,” Arnault once told the Harvard Business Review, adding, “fortunately.”

“Our whole business is based on giving our artists and designers complete freedom to invent without limits,” he said. “If you look over a creative person's shoulder, he will stop doing great work.”

In the topsy-turvy world of luxury sales, raising prices can actually increase demand — to say nothing of profits — by underlining the desirability of, say, a Louis Vuitton handbag that can cost $3,000 or more. The growing number of extremely wealth people who can afford luxury goods, and the company’s early move into China as it developed into a major luxury market, have buoyed his fortune, too.

Given the company’s emphasis on its French heritage, the Paris sponsorship is “quite congruent with LVMH's image,” says Qing Wang, professor of marketing and innovation at the University of Warwick’s business school. “With the Olympics in Paris, it's an opportunity to highlight that connection.”

The modern Olympics were invented, after all, by a French nobleman, Baron Pierre de Coubertin, and French remains one of the Games' official languages.

“We do feel a responsibility because our brands are very notoriously French. We are French,” Antoine Arnault told the AP. “My father is very deeply French and loves his country. So, we feel a responsibility to, yes, to do things the right way.”

The company’s 150 million-euro ($162 million) financial contribution, a figure reported by news media and analysts but not confirmed by the organizing committee or the company, would place LVMH at or near the top of the Games' largest sponsors list. The sponsorship helps the organizing committee reach its stated goal of a privately funded Games that avoid the cost overruns of earlier Olympics. (The Games' 4.38 billion-euro budget is 96% covered by private revenues, including from sponsors, ticket sales and television revenue. The 4% share that is public funding goes toward the Paralympic Games that follow.)

There are risks to LVMH's image investment — if, for instance, the Games are marred by protests in France’s unsettled political climate. “The French are considered world leaders in protesting,” notes Solca. And it's an undeniable fact that, as Solca puts it, “luxury thrives on income inequality” — while Macron has touted the Games as wide open, critics have seized on the unattainability of access to many events and the luxury brands intertwined.

One thing is fairly certain: Paris won't see a sudden upsurge in luxury shopping during the Olympics themselves.

The crowds may discourage rich travelers from coming to spend, and street closures will hinder access to stores — including Avenue Montaigne, where LVMH's flagship store stands.

McHugh reported from Frankfurt, Germany.

For more coverage of the Paris Olympics, visit https://apnews.com/hub/2024-paris-olympic-games.

A Berluti suit designed to be worn by French athletes during the opening is displayed inside the LVMH Pavilion, showcasing creations of the French luxury brand related to the Paris 2024 Summer Olympics, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

Dior Bar suits in the colors of the French flag are displayed inside the LVMH Pavilion, showcasing creations of the luxury brand related to the Paris 2024 Summer Olympics, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

A trunk designed to hold a Paris 2024 torch is displayed inside the LVMH Pavilion, showcasing creations of the French luxury brand related to the Paris 2024 Summer Olympics, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

Outfits designed by French luxury brand LVMH to be worn by volunteers at Paris 2024 medals ceremonies, are displayed inside the LVMH Pavilion, showcasing LVMH creations related to the Paris 2024 Summer Olympics, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

A monogrammed trunk designed to protect and display the Olympic medals created by LVMH's Maison Chaumet for the Paris 2024 Summer Olympics, is showcased along with other Olympics related items designed by the luxury brand, at the LVMH Pavilion, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

A monogrammed trunk designed to protect and display the Olympic medals created by LVMH's Maison Chaumet for the Paris 2024 Summer Olympics, is showcased along with other Olympics related items designed by the luxury brand, at the LVMH Pavilion, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

Antoine Arnault, of the French luxury group LVMH, attends an event to open the LVMH Pavilion, showcasing creations of the luxury brand related to the Paris 2024 Summer Olympics, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

Antoine Arnault, of the French luxury group LVMH, speaks at an event to open the LVMH Pavilion, showcasing creations of the luxury brand related to the Paris 2024 Summer Olympics, Monday, July 22, 2024, in Paris. (AP Photo/Rebecca Blackwell)

FILE - The Louis Vuitton Foundation building designed by American architect Frank Gehry is pictured before the presentation of Louis Vuitton's Spring/Summer 2015 ready-to-wear fashion collection in Paris, Wednesday, Oct. 1, 2014. With a major sponsorship role aimed at burnishing the image of the Paris 2024 Summer Olympic Games and the French capital, it's a new chapter in LVMH's specialty of selling exclusivity at a grand scale under its chair and CEO, Bernard Arnault. (AP Photo/Francois Mori, File)

IOC President Thomas Bach, center, French President Emmanuel Macron, center left, his wife Brigitte Macron, third left, and LVMH CEO Bernard Arnault, centre right, applaud during the IOC Session Opening Ceremony at the Louis Vuitton Foundation ahead of the 2024 Summer Olympics, Monday, July 22, 2024, in Paris, France. (AP Photo/Thibault Camus)

IOC President Thomas Bach, center, French President Emmanuel Macron, center left, his wife Brigitte Macron, left, and LVMH CEO Bernard Arnault, right, sit, during the IOC Session Opening Ceremony at the Louis Vuitton Foundation ahead of the 2024 Summer Olympics, Monday, July 22, 2024, in Paris, France. (AP Photo/Thibault Camus)

FILE - CEO of LVMH Bernard Arnault listens at the global tech conference Viva Technology at the Elysee Palace in Paris, Tuesday, Feb. 21, 2017. With a major sponsorship role aimed at burnishing the image of the Paris 2024 Summer Olympic Games and the French capital, it's a new chapter in LVMH's specialty of selling exclusivity at a grand scale under its chair and CEO, Arnault. (AP Photo/Michel Euler, Pool, File)

FILE - CEO of LVMH Bernard Arnault presents the group's 2019 results during a press conference, on Jan. 28, 2020, in Paris. With a major sponsorship role aimed at burnishing the image of the Paris 2024 Summer Olympic Games and the French capital, it's a new chapter in LVMH's specialty of selling exclusivity at a grand scale under its chair and CEO, Arnault. (AP Photo/Thibault Camus, File)

FILE - LVMH luxury group CEO Bernard Arnault, left, and French President Emmanuel Macron arrive at Fondation Louis Vuitton to visit the exhibition 'The Morozov Collection, Icons of Modern Art' in Paris, Tuesday, Sept. 21, 2021. With a major sponsorship role aimed at burnishing the image of the Paris 2024 Summer Olympic Games and the French capital, it's a new chapter in LVMH's specialty of selling exclusivity at a grand scale under its chair and CEO, Arnault. (Yoan Valat/Pool Photo via AP, File)

DES MOINES, Iowa (AP) — Three Libertarian candidates seeking U.S. House seats in Iowa will not appear on the ballot this November following a judge's ruling Saturday, upholding a state election panel’s decision.

The ruling came in an appeal by the candidates after the State Objection Panel, composed of one Democratic and two Republican elected officials, ruled 2-1 that the Libertarian candidates should be removed from the ballot on a technicality.

The panel agreed with several Republican Party officials who argued that the Libertarian Party failed to follow state law when it nominated the candidates at its party convention, which was held on the same day as precinct caucuses where the candidates were selected. State law says the term of convention delegates begins the day after the caucuses.

That means the Libertarian candidates were not nominated at valid county conventions, conservative attorney Alan Ostergren argued.

Polk County District Judge Michael Huppert agreed and rejected the candidates' arguments that the state panel had no authority to strike them from the ballot. He found that the state law is “mandatory in nature and requires strict compliance.”

“The panel concluded correctly by requiring this level of compliance,” Huppert wrote.

The panel's two Republican members, Attorney General Brenna Bird and Secretary of State Paul Pate, sided with the challengers, saying the parties are obligated to follow the rules governing candidate nominations. The lone dissent on the three-person panel came from State Auditor Rob Sand, a Democrat, who accused his colleagues of political bias.

Independent or third-party candidates usually have little chance of winning. Still, the question of how their margin of support could change the outcome of the race vexes Democratic and Republican leaders alike.

“In general, the parties are worried about minor parties that might take votes from them,” said Stephen Medvic, professor of government at Franklin & Marshall College. “It’s a pretty straightforward calculus. The Libertarian is more likely to take votes from the Republican.”

Challenges to third-party candidates are as common as the election cycle, Medvic said, and especially at the presidential level, they often occur in swing states where a fraction of the vote for a third-party candidate could matter most.

One of Iowa’s four congressional races was decided by a razor-thin margin in 2022. Republican Zach Nunn, who challenged incumbent Democrat Cindy Axne, won by less than a percentage point. There was not a third-party candidate.

The Libertarian Party of Iowa reached major party status in 2022, when their nominee for governor earned support from more than 2% of voters.

The state’s attorney told the judge at a hearing Thursday that the state’s regulations for major parties are reasonable and non-discriminatory to keep the nominating process organized and transparent, arguing that Iowa’s interest in keeping the candidates off the ballot is to maintain election integrity.

The chair of the Libertarian Party of Iowa, Jules Cutler, told the judge that this was “bullying” to keep the “small kid on the block” off the ballot. Cutler has called the party’s technical mistakes embarrassing but argued they should not invalidate the nominations.

The judge’s ruling means that the names of Libertarian nominees Nicholas Gluba in the 1st District, Marco Battaglia in the 3rd District and Charles Aldrich in the 4th District will not be included — for now — on the ballot.

Ballots were supposed to be certified by Pate’s office on Sep. 3, but the judge ordered certification to be put on hold until the issue could be heard in court. An appeal to the Iowa Supreme Court is still possible, further delaying the certification and printing of ballots.

The State Objection Panel, consisting of Iowa Auditor Rob Sand, Secretary of State Paul Pate and Attorney General Brenna Bird, meet Wednesday, Aug. 28, 2024, at the Iowa Capitol in Des Moines, Iowa. (Erin Murphy/The Gazette via AP)