If you were asked who you thought was the world's richest person, who would you pick?
A. Jeff Bezos
B. Elon Musk
C. Bill Gates
D. Mark Zuckerberg
E. Warren Buffett
F. None of the above
If you picked "F," not only would you be correct, you'd probably be shocked to find out the world's richest person is probably someone you've never even heard of: Bernard Arnault. If you haven't heard of him, you're not alone. Most people haven't -- until now.
To be fair to those of you who might have picked a different choice, the world's richest person changes constantly. People in this group tend to be a tad competitive, and if they fall to No. 2, they will probably rise back up to No. 1 in no time. But in this moment in time, anyway, the distinction goes to Mr. Arnault.
Who is Bernard Arnault?
Bernard Arnault, a 72-year-old Frenchman, is the founder and chair of LVMH Group (OTCMKTS: LVMUY), which comprises 75 "houses" of luxury products. (Luxury goods and haute couture began in Paris.) You might not have heard of Arnault, but you most likely have heard of LVMH's products: Louis Vuitton, Tiffany, Hennessy Christian Dior, Bulgari, Tag Heuer, and many more.
The one thing these brands have in common is they cater to a certain class of people, sometimes referred to as the "haves." And the haves, or the wealthy, have become even wealthier during the pandemic, as evidenced by the stock surge -- someone's (well, lots of "someones") been buying all these luxury brands.
Why is Arnault so rich?
LVMH is worth just shy of $403 billion, and Arnault owns about 47% of that, or close to $200 billion, just a tad bit more than the worth of Jeff Bezos. But these extreme riches for the LVMH Group are newly found. Barron's reports [subscription required] that LVMH stock is up 35% so far this year after it surged 140% since March 2020, a date that will go down in history as being the start of the lockdowns.
In recent years, the Chinese have been one of the biggest luxury goods consumers. Prior to COVID-19, the Chinese made up one-third of global spending for these items. This number jumped to almost 50% in 2020.
While no one was buying luxury items at the beginning of the pandemic, China recovered faster than the rest of the world, and the Chinese started buying luxury goods again. Although Chinese citizens weren't traveling to Paris or Milan during the pandemic, they were shopping online and visiting the luxury stores that opened in mainland China.
The Millionacres bottom line
The rich got richer during the pandemic. Business Insider reports that just in the United States alone, billionaires increased their total net worth by $637 billion. Meanwhile, people weren't able to pay their rent or mortgages amid high unemployment, and many businesses were forced to shut down.
Commercial real estate investors might wish to invest in companies that cater to the wealthy. Or to folks at the other end of the spectrum: Dollar General, for example, is also on a tear.