Many in the aviation industry believe that an electric passenger plane with a useful range and seating capacity is at least a decade away. The Israeli startup Eviation is hoping to prove this year that it can get there a lot sooner.
The company is working feverishly to assemble a prototype of its nine-passenger battery-electric plane by June to display at the Paris air show, and to gain an airworthiness certificate shortly thereafter to begin flight testing in the United States.
The 35-employee company is getting its funding and supply chain squared away. It says it’s secured the roughly $200 million it needs to get through certification, and it announced Wednesday that it will source high-power electric motors from Siemens.
A good chunk of its funding is from Clermont Group, the private investment fund of Singapore-based billionaire Richard Chandler, which acquired notes convertible to a 70% share in Eviation for $76 million, according to a filing with the U.S. Securities and Exchange Commission dated Jan. 3.
Eviation is developing a plane targeted at the regional transportation market in North America, believing there’s untapped demand for short-haul flights of 500 miles or less at a lower price than currently possible with the piston and turboprop planes that ply many secondary routes.
Amid a flood of startups trying to build electric urban air taxis that can take off and land vertically, Eviation stand out with its strategy to tack a new propulsion system onto an airframe that isn’t radically different from existing ones, and to serve and expand an existing market, which could give it greater near-term odds of winning regulatory approval.
Washington State’s Zunum Aero is also taking a similar approach, but the Boeing-backed company is planning to use a hybrid gas-electric propulsion system.
Eviation says its plane, dubbed Alice, will be able to cruise at 275 mph with a maximum range of 650 miles, with a half hour of recharging time for every hour in the air. The company claims that the plane’s reduced maintenance demands and the much lower cost of electricity relative to aviation fuel will give it direct operating costs of about $200 per flight hour, at least 50% less than turboprop planes with comparable seating capacity.
“This is a game-changing cost reduction,” CEO Omer Bar-Yohay told Forbes in a telephone interview. He’s betting Alice’s low operating costs will motivate fleet operators of small planes to replace decades-old Cessna Caravans or Beechcraft King Airs.
Eviation debuted a one-third scaled autonomous version at the 2017 Paris Air Show that the company has flown to validate its design. The plane will will weigh 14,000 pounds and measure 60 feet across the wings, larger than comparable conventional aircraft, with a little more than half the weight accounted for by the batteries, which will be distributed throughout the fuselage and wings.
It will have a main pusher propeller behind its V-shaped tail and two smaller propellers at either wingtip that will reduce drag. Bar-Yohay says the weight and the ability the plane will have to adjust thrust propeller by propeller will give the plane a smoother ride.
“You can do yaw corrections or even pitch corrections not by moving control surfaces but by using differential thrust,” says Bar-Yohay, who spent 13 years in the Israel Defense Forces as a paratroop officer.
His co-founder, Aviv Tzidon, is a former fighter pilot in the Israeli Air Force and serial entrepreneur who has taken three tech startups public on the Nasdaq.
The plane will be controlled by a fly-by-wire system developed with Honeywell. Siemens will supply electric motors with an output of 260 kilowatts; lithium-ion batteries will be supplied by Kokam of South Korea. The French company Multiplast is producing the composite airframe and is assembling the initial prototype.
Bar-Yohay says Eviation has had extensive discussions with the U.S. Federal Aviation Administration on requirements for certification, a milestone he hopes to achieve in 2021, with first deliveries in 2022.
While Bar-Yohay acknowledges that there could be a first-mover disadvantage in being the first company to try to certify a commercial electric passenger aircraft, he says it won’t require the rule-writing that will be needed to bring radical new designs like VTOL air taxis to market.
“Our plane behaves like a plane and looks like a plane,” says Bar-Yohay.”For the regulatory bodies we’re probably the aircraft they want to see first.”
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Nonetheless there are a multitude of safety questions that the FAA has never addressed before, warns Ernie Arvai, head of the consultancy AirInsight, including the fire risks of the batteries, charging degradation and power reserves, and the agency could proceed cautiously and potentially painfully slowly for Eviation. “If there’s something that they don’t understand there’s a risk aversion and they won’t push it,” he says.
Arvai anticipates the painstaking certification process, which is expensive even in the best cases, could cost 1-1/2 times the norm for Eviation.
Bar-Yohay says he has a sufficient war chest to make it through to what he calls initial “embryonic” production of 10 to 20 airframes a year, with a total of roughly $200 million in capital raised and loans.
The lion’s share of that appears to be from billionaire Richard Chandler, a native of New Zealand who moved to Singapore in 2006 after shutting down Sovereign Group, an investment firm he co-founded with his brother Christopher. Chandler’s Clermont Group has also invested in MagniX, a Redmond, Wash.-based startup developing an electric propulsion system for aircraft.
An Isle of Man-registered company called Timon Limited also has made a $10 million investment in Eviation, according to an SEC filing. Bar-Yohay declined to disclose the sources of the rest of the company’s funding.
The company filed to deregister its U.S. listing as an over-the-counter stock.
Bar-Yohay says Eviation has firm orders from two small commercial carriers for a “double-digit number” of aircraft, enough to account for the first two years of production.
Eviation may be targeting the right market, says Arvai, and he’s impressed by the plane’s design, but he’s skeptical that the current generation of batteries have a high enough power to weight ratio to allow the company to deliver a product that has competitive operating costs.
Many short-haul planes operate for 11 to 12 hours a day, notes Arvai, with perhaps one 15-minute refueling. If the Eviation Alice will need a half hour of charging for every hour in the air, and it can only fly 8 or 9 hours a day, that would reduce the number of flights it could perform and revenue.
“I think they’re ahead of where the battery technology needs to be,” Arvai says. “We will get there, but I think it’s 2030, not 2022.”
Bar-Yohay believes batteries are good enough now, and that this is a rare moment when scrappy entrepreneurs can elbow their way into aerospace by leveraging new technologies. “Someday we’ll look back and say, ‘these were the good old days.’ “
-Jeremy Bogaisky; Forbes Staff
Can Diddy’s Ciroc Recipe Work On Alkaline Water?
The first time Sean “Diddy” Combs took a sip of Aquahydrate alkaline water—given to him by pal Mark Wahlberg at a Las Vegas boxing match in the early 2010s—he found it to be an ideal antidote for evenings spent consuming adult beverages.
“I went out that night and had a Vegas night, and I woke up and had a Vegas morning,” Diddy told me in 2015. “I drank two of the [Aquahydrate] bottles and it was, like, the best tasting water that I’ve tasted. And it really, honestly helped me recover.”
Diddy became the face of the company alongside Wahlberg shortly thereafter, and the pair invested $20 million in Aquahydrate over the years while billionaire Ron Burkle’s Yucaipa added another $27 million.
They aren’t the only ones with lofty ambitions for the brand: last week the Alkaline Water Co., the publicly-traded purveyor of competitor Alkaline88, bought Aquahydrate in an all-stock deal that valued the latter at about $50 million.
For Diddy, who ranks No. 4 on our recently-released list of hip-hop’s top earners and boasts a net worth of $740 million, alkaline water holdings are just a drop in his financial bucket. His Diageo-backed Ciroc vodka—and its myriad flavors, from Red Berry to Summer Watermelon—is responsible for the lion’s share of his wealth. But it’s clear he thinks alkaline water, flavored variants included, could swell his portfolio. So do his new partners.
“You put both these brands under one public company, it makes a ton of sense,” says Aaron Keay, Alkaline’s chairman, of the Aquahydrate deal. “We see synergies on distribution, we see cost-savings on cost of goods. On production, on logistics, on staffing. … And we don’t see both brands actually then competing for the same target market.”
In the past, flavored water has enriched investors including some of Diddy’s hip-hop world comrades. A little over a decade ago, 50 Cent famously took Vitaminwater equity in lieu of stock as payment for his endorsement—and walked away with some $100 million when Coca-Cola bought its parent company for $4.1 billion in 2007.
A ten-figure valuation for an alkaline water company seems an outlandish target even for the notoriously bombastic Diddy. But Keay notes Alkaline clocked $33 million in revenues over the past fiscal year and had been expecting $48 million in 2020; now, with Aquahydrate on board, he projects closer to $60-$65 million. That compares favorably to Core Water, which was doing some $80 million as of last year before getting acquired.
“For two or three years, Core Water was just another clear water,” says Keay. “Then they added about a half dozen flavors. Sales doubled. They got bought for $500 million. I mean, for us, $500 million would be a big number off of where our market cap is right now.”
Diddy appears to be an ideal ally in achieving that goal. With Ciroc, once a middling vodka in Diageo’s roster, he was able to articulate importance of the brand’s defining trait: it was made from grapes, not grains (never mind that this might technically disqualify it from being considered a vodka). His contention, according to Stephen Rust, Diageo’s president of new business and reserve brands, is that grapes are simply sexier than potatoes.
“One of his favorite things [to say] is, ‘If you can have a vodka that comes from a history of winemaking, why would you do that versus the history of coming from potatoes?’” Rust explained in an interview for my book, 3 Kings: Diddy, Dr. Dre, Jay-Z, And Hip-Hop’s Multibillion-Dollar Rise. “That’s Sean.”
With alkaline water, Diddy has demonstrated a similar knack for sizing up a product and extracting an elemental notion that passes muster with consumers (if not necessarily scientists). If “you’re full of acid,” Diddy once explained to me, you need to “get your body leveled out.”
Vodka and water, of course, are two very different products, and the same tactics won’t necessarily translate from one business to another. Flavored water itself seems to have been over-carbonated of late, as the recent struggles of brands like La Croix show; Alkaline’s shares have slumped this year as well.
Perhaps that’s why Alkaline is looking beyond its flagship bottled water business. Future plans call for a move towards cans in a nod to environmentally-conscious customers, as well as expansion into the nascent CBD-infused beverage space. Keay figures Diddy and Wahlberg, along with fellow celebrity investor Jillian Michaels, should provide a boost across the board.
“Once the FDA makes a ruling about how CBD is going to be distributed through those chains and channels, those guys are going to want trusted brands, brands that they know already have a consumer following,” says Keay. “And that was another big reason why it made sense to bring [Diddy, Wahlberg and Michaels] in, because it’s only going to help.”
–Zack O’Malley Greenburg; Forbes
Kanye West’s Second Coming: Inside The Billion-Dollar Yeezy Empire
You know when Kanye West is coming. His matte-black Lamborghini SUV rumbles up his gated driveway on the outskirts of Los Angeles like an earthquake, and when he steps out, in a white T-shirt and dark sweats, the obsessiveness kicks in immediately.
First, there’s the house: The lushly landscaped exterior of the property he shares with his wife, Kim Kardashian West, and their four children (North, Saint, Chicago and Psalm) serves as stark contrast to the unadorned alabaster walls within. Nearly every surface is a monastic shade of white. The floors are made of a special Belgian plaster; if scuffed, the delicate material can be repaired only by a crew flown in from Europe. “The house was all him,” Kardashian West later tells me. “I’ve never seen anyone that pays such attention to detail.”
As I step into the foyer, a handler asks me to wrap my black-and-gray Air Jordan high-tops in little cloth booties. To my left is West’s library, its shelves stacked with the likes of Alexander McQueen: Savage Beauty and Takashi Murakami: Lineage of Eccentrics. He fiddles with the positioning of a few books that seem off-kilter. Settling into an armchair opposite me, he surveys his interviewer closely. “The first shoe I remember sketching was the Jordan One that you’re wearing right now,” says West, 42. “God does have a way of lining things up.”
West’s precision turned him into one of the world’s most popular musicians. “He went and executed it to another level,” says DJ Khaled, who has spent time with West in the studio and joins him on this year’s Celebrity 100 list of the world’s highest-paid entertainers. But as with Michael Jordan in the 1990s, the key to West’s wealth stems from sneakers. His Yeezy shoe line, which he launched with Nike in 2009 and then brought to Adidas in 2013, has the 34-year-old Jordan empire in its sights, in terms of both cultural clout and commercial prowess. The Jordan line does approximately $3 billion in annual sales; West’s upstart is expected to top $1.5 billion in 2019 and growing.
As with the floor and the booties and the book positions, West fixates over sneaker details; he idolizes Steve Jobs, preferring a limited, carefully chosen number of products with an endless array of colorways. The iPod in West’s world: the ubiquitous, chunky-bottomed Yeezy Boost 350s, which come in dozens of varieties of the same shoe and account for the bulk of Yeezy’s sales. “I am a product guy at my core,” West says. “To make products that make people feel an immense amount of joy and solve issues and problems in their life, that’s the problem-solving that I love to do.”
The obsessiveness is unrelenting. When Forbes shot West for a possible cover, he insisted on wearing a black hoodie. Urged to return the next day to try again, West obliged—wearing the same hoodie. He’s been known to edit albums days after they’ve already been released. And when he didn’t feel I was properly absorbing the religious influence on his business (coming from the guy who calls himself Yeezus and is working on an album tentatively titled Yandhi), he called my editor impromptu on a Saturday evening to hammer the point some more.
Whatever, it’s working. Mostly because of the shoes, Forbes pegs his pretax income at $150 million over the past 12 months; his team insists the number is even higher, partly due to his Yeezy apparel. In any case, it’s by far the best stretch of his career, good for No. 3 on our Celebrity 100 list.
Rewind to three years ago, when West claimed to be $53 million in debt, just before canceling the back of a lucrative arena tour and checking into a Los Angeles hospital for over a week with symptoms of sleep deprivation and temporary psychosis. West credits his turnaround to religious beliefs (“being in service to Christ, the radical obedience”)—and, on occasion, to being bipolar. Call him creative, call him chaotic—just don’t call him crazy. Like some entrepreneurs with conditions like ADHD and Asperger’s, he sees his diagnosis not as a hindrance but as a “superpower” that unlocks his imagination.
“ ‘Crazy’ is a word that’s not gonna be used loosely in the future,” West says. “Understand that this is actually a condition that people can end up in, be born into, driven into and go in and out. And there’s a lot of people that have been called that ‘C’ word that have ended up on this cover.”
West’s design obsession dates back as far as his passion for music. Born in Atlanta and raised in Chicago, he often got in trouble as a middle schooler for sketching sneakers in class. When West’s mother, a college professor, took him to see the Japanese cyberpunk flick Akira, he found inspiration in the film’s shapes and color palettes; he also remembers his father, a former Black Panther, taking him to auto shows, where he became obsessed with the Lamborghini Countach. “There’s a little bit of Lamborghini in everything I do,” West says. “Yeezy is the Lamborghini of shoes.”
Meticulousness served West in his music career, which took off when he caught on as a producer for Jay-Z’s Roc-A-Fella Records after dropping out of college. He masterminded the sonic skeleton of Jay-Z’s seminal 2001 album, The Blueprint. When West launched as a solo artist two and a half years later, he designed something genre-bending, his early work peppered with Marvin Gaye and Daft Punk samples; West recorded with Coldplay and toured with U2. In contrast to the snarling materialism put forth by the dominant rappers of the day, West presented a more vulnerable sort of protagonist, with three albums featuring higher-education themes. Gone were tales of drug dealing and street skirmishes; in their place were reflections on dental surgery, racial injustice and working at the Gap, punctuated by a witty swagger.
His fame gave him a chance to return to his first love: sneakers. In 2007, he created a shoe for the Japanese apparel company A Bathing Ape, complete with a teddy bear logo that appeared on some of his early covers. (Find one of those shoes today and you’ll net several thousand dollars.) It was a start, and he cultivated a cadre of fashion-industry friends like Hedi Slimane, who has served as creative director at Dior Homme and Yves Saint Laurent. “You’re going to do something really strong in shoes,” West remembers the designer telling him. That sort of encouragement gave West the confidence to whip out a notepad when he found himself on a plane with Nike CEO Mark Parker shortly thereafter. Says West: “When he saw me sketch, he said, ‘This guy’s interesting, let’s do a shoe with him.’ ”
Yeezy was born (a shortening of the “Kanyeezy” nickname Jay-Z gave him in the intro to a 2003 song). West says Parker put him in the room with Air Jordan designer Tinker Hatfield, and by mid-2008, West was rocking prototypes of his own Air Yeezy high-top onstage, with the genuine article arriving in 2009. Hip-hop has connected with footwear almost since the genre was born, from Run-D.M.C.’s Adidas shell toes in the mid-1980s to Jay-Z and 50 Cent’s Reeboks two decades later. West was the first to do it at Nike on the level of an NBA superstar.
Says analyst John Kernan of investment bank Cowen, “What he’s done in footwear has been truly transcendent.”
At the same time that West’s business interests were shifting, he began changing too. His mother died in a 2007 cosmetic procedure gone wrong; the following year, he split with his fiancée Alexis Phifer. On his album, 808s and Heartbreak, he ditched rap for heavily autotuned singing.
Then came the bizarre. He hopped onstage to interrupt Taylor Swift’s 2009 acceptance speech for Best Female Video at the MTV VMA ceremony, insisting that Beyoncé should have won the award instead; the episode generated such an intense backlash that he cancelled his planned arena tour with Lady Gaga and moved to Italy to intern for Fendi. When he returned from his European sojourn, his previous praise for the Creator was superseded by an insistence on his own holiness, particularly his 2013 album Yeezus, where he declared flatly, “I am a god.”
West kicked off 2016 by unleashing flurries of Tweets, asserting that he was $53 million in debt before asking Mark Zuckerberg for $1 billion to help fund his creative ideas. Then he embarked on his most ambitious tour yet—one that featured him holding forth atop a platform that looked like something out of Close Encounters of the Third Kind, hovering about a dozen feet above the crowd. West’s rants grew more and more unusual as the tour continued. In one performance, he suggested Jay-Z might be trying to have him assassinated. The year ended with West hospitalized after the tour cancelation. His first appearance after? A pilgrimage to Trump Tower, where he posed with the president-elect (and turned off a lot of his core audience).
His career, however, has proved antic-proof. And he has channeled his intensity profitably, particularly when it comes to sneakers. As sales blossomed at Nike, particularly after the Air Yeezy II release in 2012, West felt that the company was treating him like just another celebrity dabbler. “It was the first shoe to have the same level of impact as an Air Jordan, and I wanted to do more,” West says. “And at that time Nike refused to give celebrities royalties on their shoes.” (Nike declined to comment for this story; two other sources familiar with the arrangement also say he wasn’t being paid royalties.)
West, however, had always insisted on maintaining ownership of his brand. And when Adidas executives caught wind of West’s dissatisfaction, they invited him to Germany. With the help of Scooter Braun, who started a stint comanaging West around the same time, they created what appears to be an unprecedented deal: a 15% royalty on wholesale, according to sources familiar with the deal, plus a marketing fee. For comparison, Michael Jordan is thought to get royalties closer to 5%, though he doesn’t own his brand.
In 2015, West debuted his first “Yeezy Season,” a showcase for his clothing and sneakers. The next year he leveraged his new album to create a launch party for both sneakers and song, at a sold-out Madison Square Garden. His biggest breakthrough: the 350. Marrying his eye for design with Adidas’ Boost technology, which purports to efficiently return energy to runners, West turned trainers into high fashion and made low-top sneakers cool again. The 350’s aggressive stance, leaning forward as if to challenge any foe to a footrace, suddenly had scores of people willing to cough up $200 for a pair of running shoes. Adidas has never released Yeezy’s numbers, but in 2016 West let it slip that his sneakers were selling out surprise 40,000-pair drops in minutes.
His wife—West and Kardashian married in Florence in 2014—gets an assist here, opening up West to her family’s hundreds of millions of social media followers (they routinely sport his Yeezy shoes and apparel).
The partnership works both ways. Kardashian West seeks out her husband’s opinion on all of her projects, from the Kim Kardashian: Hollywood mobile game to her recent shapewear line. When she brought him mockups for the latter, West wasn’t impressed. He sat down and drafted a new logo before personally redesigning the packaging. In any case, West’s advice isn’t limited to the creative side. “He’s just taught me as a person to never compromise and to really take ownership,” says Kardashian West, who ranks No. 26 on The Celebrity 100. “Before, I was really the opposite. I would throw my name on anything.”
Given their hectic schedules, Kardashian West and West often trade ideas at what he calls “bedtime true-crime story meetings,” where she watches police procedurals while he shows her mockups.
“I’m just blessed through the grace of God to go from tweeting at Mark Zuckerberg” to ask for money, West says, to where he is today. He can laugh at himself a little now. “People wondered, ‘Why did you tweet at Mark Zuckerberg?’ And I was like, ‘Hey, I heard he was looking for aliens.’ ”
Speaking of aliens, if you really want to see how West’s creative process works, then a visit to the Star Wars planet of Tatooine is necessary. Inspired by Luke Skywalker’s childhood home, West has been working with a team to design prefabricated structures that sport the same austere aesthetic, with the goal of deploying them as low-income housing units. Just after midnight he ushers me into his Lamborghini for an impromptu visit, barreling back down the road with Bach blasting on the sound system. After about 15 minutes, we arrive at a bungalow in the woods.
A team of four is still clattering away on Apple laptops inside, ahead of a meeting the following morning in San Francisco with potential investors. Around them, the walls are plastered with written notes and sketches. West peers over the shoulders of his charges, instructing them to change a font here or brighten a picture there.
“He pushes people to do their best and pushes people even outside of their comfort zone, which really helps people grow,” Kardashian West says, citing West’s relationship with Louis Vuitton designer and Off-White label founder Virgil Abloh.
After a half hour or so, West appears satisfied with the state of the presentation and motions me toward a back door. We stroll out into the chilly, starless night, and I follow him up a dirt path deeper into the woods for several minutes until he stops at a clearing and looks up, wordless. There, with the hazy heft of something enormous and far away, stand a trio of structures that look like the skeletons of wooden spaceships. They’re the physical prototypes of his concept, each oblong and dozens of feet tall, and West leads me inside each one.
He tells me they could be used as living spaces for the homeless, perhaps sunk into the ground with light filtering in through the top. We stand there in silence for several minutes considering the structures before walking back down to his lurking Lamborghini and zooming off into the night.
For a company that makes Lamborghini-inspired sneakers, Yeezy’s headquarters are remarkably nondescript: a blocky blue-and-gray building just off the main drag in Calabasas. It’s not far from where he’s been hosting his recent Sunday Services—gatherings where popular songs are repurposed with Christian themes by gospel choirs and famous guests from Katy Perry to Dave Chappelle.
When I meet up with West after his return from San Francisco, he doesn’t even mention the investor meeting—already fixated on something else enormous out back. In the parking lot behind his office, laid out in concentric circles, is the sum total of West’s creative output at Adidas: a trove of sneaker prototypes baking in the midday sun, variants of his 350s in a rainbow ranging from blood orange to creamy pistachio alongside a few yet-to-be-released gems like the almost triangular Yeezy basketball shoe (which, he adds almost proudly, has yet to be approved by the NBA—echoing the days when the league fined Michael Jordan for wearing his eponymous sneakers because they violated uniform rules).
West scoops up a 1050 Vortex Boot, which debuted in prototype form at Madison Square Garden in 2016. “I just looked at this line right here,” he says, motioning to a thin strip of blue masking tape on the sole. “I’m going to make this part of the boot. The inside of this will be blue. And I just go with the flow.”
There are about 1,000 pairs laid across the lot, it seems, but when I ask West for the exact tally, he seems almost offended at the notion of reducing his creations to numerals. “You can’t calculate love,” he explains. “If you get a surprise cake from your grandmother, and you didn’t know she was in town, do you start asking her about the batter and specifically the frosting?”
“These things are made to bring incalculable joy,” he continues. “So to ask me to somehow translate this to numbers is to ask your grandmother exactly what the recipe of the cake was.”
West claims to not be a “numbers guy,” but he has reached an inflection point where someone in the Yeezy orbit needs to be. His brand built its following through its limited releases and surprise drops, much like Air Jordan. The latter, according to NPD retail analyst Matt Powell, has lost a bit of its cachet in recent years as Nike moved to fill declining volume in other areas of business with its iconic sub-brand. “What makes celebrity products sell so well is scarcity,” he says. “So if they make it too broadly available, I think it crashes the business model.”
Adidas seems to be aware of this. “We are continuing to manage volumes in a very disciplined manner so that for 2019 Yeezy sales will not make up a significant share of Adidas’ overall expected sales growth,” says the company’s chief executive, Kasper Rørsted. “Not because brand heat is decreasing, but because we have a disciplined approach to managing volumes and product lifecycles.”
In other words, he’s not willing to chase sales at the expense of prestige, instead continuing to build buzz with surprise drops. The May release of the glow-in-the-dark 350 v2 sold out immediately, even though it rolled out at 6 a.m. in some countries. In June, customers lined up around blocks in Moscow to get a reflective version of a sneaker that had already debuted in the U.S. There are even more far-out concepts in the works, including a shoe made out of algae that will biodegrade completely over time in landfills—or almost immediately if sprayed with a certain type of bacteria.
Perhaps most impressively, West still owns 100% of Yeezy. This is the reason he became a centimillionaire many times over much earlier in his life than Jordan. Given Yeezy’s success, West should eventually join the NBA legend—alongside sister-in-law Kylie Jenner and mentor Jay-Z—in achieving billionaire status, though the never-modest West would claim he’s there already. And then some. “We’ve yet to see all of the beauty that would be manifested through this partnership,” West says. “We’ve only experienced a small glimmer of light.”
Additional reporting by Monica Mercuri and Natalie Robehmed.
-Zack O’Malley Greenburg; Forbes Staff
Luxury Goods Titan Bernard Arnault Becomes World’s Third $100 Billion Man
One of the world’s ultimate taste-makers, Bernard Arnault entered an ultra-rarefied club this week. As of Thursday June 20, he was worth just over $100 billion, making him one of three people in the world with 12-figure fortunes.
He joins Amazon’s founder Jeff Bezos, worth an estimated $157.5 billion, and Microsoft cofounder Bill Gates, worth an estimated $103.1 billion. Bezos, who first passed $100 billion in 2017, will soon give a slice of that fortune away.
He and his wife, MacKenzie, are in the process of finalizing their divorce. The couple announced in early April that she will receive a quarter of his Amazon stake, currently valued at more than $37 billion. Gates reached $100 billion in April, thanks to strong earnings from Microsoft.
Arnault’s luxury goods group, LVMH Moët Hennessy–Louis Vuitton, has been having a great year. In April, it announced record first quarter sales and profits on top of a strong 2018. Its shares are up more than 40% so far in 2019, boosting Arnault’s fortune by more than $20 billion.With his family, he owns 46% of LVMH and serves as both its chairman and CEO.
The growth comes as high-end buyers around the world continue to pick up luxury goods and spirits, despite fears that demand, particularly in China, would slow down. Thirty-five years after Arnault first got into luxury goods with the purchase of Christian Dior, he continues to refresh LVMH by finding ways to appeal to a new generation of customers while retaining the traditional values and high quality that have defined its brands.
That includes innovative partnerships like the two with Rihanna — Fenty Beauty and Fenty fashion house — as well as recent deals such as the acquisition of Belmond, which operates luxury hotels, trains and even safaris.
“People do not understand that success stems from the cohabitation of two contradictory spirits: the artist’s vision and the logic of worldwide marketing,” Arnault told Forbes in 1997. “It’s a very complex process.”
Forbes first wrote about Arnault in 1991 when he was worth $200 million. He has since been featured several times and has appeared on our cover. He made his debut in our Billionaires ranks in 1997. Some readers may know his story well but it’s one worth retelling.
A native of France’s cold, flat industrial north, Arnault was a star student at France’s prestigious Ecole Polytechnique. The son of a construction tycoon, Arnault spent three years in the U.S. in the early 1980s trying to establish a branch of his family’s real estate business, Ferinel, as a developer of Florida vacation properties.
After three years he returned home. But he learned a valued lesson in America, according to a 1997 Forbes profile on Arnault. Before leaving, he sold his Mediterranean-style home facing Long Island Sound in New Rochelle, N.Y. to American tycoon John Kluge, owner of the mansion next door. Kluge tore it down because it blocked his view.
“It was just incredible!” Arnault told Forbes. “It was a very nice place, but two days after he bought it, he tore my house down! It’s so very…American.” Lesson learned: “When something has to be done,” says Arnault, “do it! In France we are full of good ideas, but we rarely put them into practice.”
He returned back to France ready to make some moves. In 1984, Arnault put up $15 million of his family’s money to rescue bankrupt textile empire Boussac (Lazard put up the rest). Among Boussac’s mixed bag assets was money-losing fashion house Christian Dior.
That became the first of many Arnault acquisitions and the cornerstone of his massive luxury goods empire. Over the years, LVMH snapped up such brands such as Louis Vuitton, Givenchy and Sephora. Today LVMH has nearly $53 billion in sales from 70 brands and 4,590 retail stores.
-Luisa Kroll; Forbes Staff
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