In contrast, the wealth of the other people on the world's top 500 rich list increased by 1 trillion dollars or 13% during the same period, creating the largest gap since May 2022. The luxury goods industry is being impacted by the macroeconomic slowdown in major economies around the world, as well as concerns over geopolitical issues, and the political deadlock in France is creating additional challenges.
On Tuesday, July 16th, European stocks fell again. Opening Ceremony Group, a luxury goods giant that fell by nearly 5.3% yesterday, fell by another 3.1%. LVMH Group, the parent company of Louis Vuitton, which fell more than 2.6% yesterday, fell by 1.9%, and L'Oreal, the cosmetics leader, which fell more than 1% yesterday, fell by 1.6%. Hermes, the luxury goods leader, which also showed the largest decline yesterday, fell by 2.3%. The luxury goods industry continues to stagnate, dragging down the French stock index to the deepest decline in European stocks.
According to Bloomberg Billionaires Index statistics, the world's largest luxury goods group with 75 brands such as Dior, Tiffany and Hennessy.$LVMH Moet Hennessy Louis Vuitton (LVMUY.US)$The founder, 75-year-old Arnault, has lost the title of the world's richest man. His wealth has shrunk by $74 billion in the past year to $200.1 billion, and his ranking has fallen below CEO Musk and founder Bezos. At the beginning of July, Francoise Bettencourt Meyer, the leader of L'Oreal, became the world's richest woman, but eventually lost the title to the member of the founding family of the world's largest retailer, Alice Walton. Last December, 70-year-old Meyer was the first woman in the world whose wealth exceeded $100 billion, but her wealth has now fallen to about $91 billion.$Tesla (TSLA.US)$CEO Musk$Amazon (AMZN.US)$Founder Bezos.
Meanwhile, the entire luxury goods industry has been affected by the slowdown in macroeconomic growth in major economies worldwide, as well as geopolitical concerns. In the post-epidemic era, the eye-catching retaliatory spending on luxury goods seems unsustainable. High-end British coat maker Burberry and French LVMH Group and other high-end brands are warning of slowing sales.$L'Oreal SA Unsponsored ADR (LRLCY.US)$Global female leader of Bettencourt Meyer's crown was once taken by Alice Walton, the member of the founding family of the world's largest retailer.$Walmart (WMT.US)$Last December, 70-year-old Meyer was the first woman in the world whose wealth exceeded $100 billion, but her wealth has now fallen to about $91 billion.
Francois Pinault, the founder of Kering, a longtime rival of Arnault and the 87-year-old parent company of Gucci, has suffered even more severe wealth shrinkage. His wealth has halved over the past three years to $28 billion. Analysts believe that the above three French luxury goods giants were all unexpectedly challenged by French President Macron's early initiation of parliamentary elections, leading to a suspended parliament and exacerbating the country's political uncertainty.
At the same time, the entire luxury goods industry has been affected by the slowdown in macroeconomic growth in major economies worldwide, as well as geopolitical concerns. In the post-epidemic era, the eye-catching retaliatory spending on luxury goods seems unsustainable. High-end British coat maker Burberry and French LVMH Group and other high-end brands are warning of slowing sales. For example, LVMH Group's sales of clothing and leather products grew significantly slower in the first quarter of this year, and sales outside Japan in Asia also fell. L'Oreal Group, which owns high-end brands such as Aesop, Lancome, Yves Saint Laurent, as well as Paris L'Oreal, Garnier and Maybelline, has seen sales slow down in all regions and price ranges around the world. The largest brand under the group, Gucci, is in trouble, which may drag down Kering's overall profit significantly in the first half of the year.
Overall, as of 2024, the wealth of six super-rich people in the luxury goods field has evaporated by more than 4%, or about $17 billion lost as of the close of July 15th Monday. By contrast, the wealth of the other people on the top 500 global richest list increased by $1 trillion or 13% during the same period. Such a gap is the largest since May 2022.
Even the billionaires in the luxury goods industry who have experienced growth during this period are warning that the market is becoming more challenging. The Wertheimer brothers behind Chanel have seen their wealth grow, and the unique French luxury brand achieved double-digit sales growth last year, but the environment is becoming more challenging, and the important American market has slowed down its demand for its handbags and iconic tweed suits. Johann Rupert, a 74-year-old South African billionaire, is a controlling shareholder of the Cartier parent company Richemont Group. Despite the increase in his wealth, the group's sales have dropped significantly in the Asia-Pacific region.
During this period, even billionaires in the luxury goods industry who have experienced growth are warning that the market is becoming more challenging.
The Wertheimer brothers behind Chanel have seen their wealth grow, and the unique French luxury brand achieved double-digit sales growth last year, but the environment is becoming more challenging, and the important American market has slowed down its demand for its handbags and iconic tweed suits. Johann Rupert, a 74-year-old South African billionaire, is a controlling shareholder of the Cartier parent company Richemont Group. Despite the increase in his wealth, the group's sales have dropped significantly in the Asia-Pacific region.
On Monday, British luxury coat manufacturer Burberry and the world's largest watchmaker Swatch Group ($Swatch Group(SWGAY.US)$) both released poor earnings reports. On Tuesday, German high-end clothing manufacturer Hugo Boss became the latest fashion brand to warn that the luxury goods industry was continuing to struggle, casting a shadow over the second-quarter reports of other well-known luxury goods such as L'Oreal and LVMH later this month.$Swatch Group (SWGAY.US)$On Tuesday, Hugo Boss, a German high-end apparel manufacturer, became the latest fashion brand to warn that the luxury goods industry is still struggling, joining other well-known luxury brands such as L'Oreal and LVMH in casting a shadow over their second-quarter earnings reports later this month.
Specifically, in the past three years, the Burberry Group has changed CEOs twice, sharply cut dividends, issued warning of operating losses for the first half of the year, and will rethink its high-end luxury goods strategy. The full-year profit will also be lower than expected, and the stock price has once plummeted by 17%. The sales and profits of Swatch Group have dropped significantly, with a sudden 70% drop in first-half operating profit, a 14% decrease in sales, and the stock price dropped by nearly 10%, which is the worst since the outbreak. Hugo Boss fell 7.5% due to weakened global consumer demand, and lowered its full-year sales and profit guidance for the second time this year. In addition, sales of the Swiss luxury group Richemont were almost flat in the three months ending June.
The indicator of measuring the top 10 luxury stocks in Europe (STOXX Europe Luxury 10, code .STXLUXP) fell nearly 3% on Monday and more than 1% on Tuesday. Other luxury brands are also under pressure, such as Italian high-end luxury brand$PRADA (01913.HK)$The stock price of luxury sports car brand Porsche also fell more than 5% at one point on Tuesday, but the quarterly report released by the company in April showed that the demand for its high-end fashion brand Miu Miu is still strong, and the Asian market continues to grow.
Editor/Emily