As demand for luxury and beauty products has declined in some areas, the founder of the high-end luxury goods backpack and champagne comprehensive enterprise LVMH, Bernard Arnault, 75, tops the Bloomberg Billionaires Index in the urban area. Francois Betancourt Meyers, the female heir of cosmetic giant L'Oreal Group, briefly gave up the title of the world's richest woman to Alice Walton of the US retail giant Walmart earlier this month, further indicating a weakening global demand for luxury goods.

This week, as British luxury coat manufacturer Burberry Group faces crisis and Swatch Group's sales plummet, the reporting season begins, and the market's low level is particularly evident. L'Oreal, LVMH and other luxury goods industry giants supported by billionaires are scheduled to release their financial reports later this month.

Overall, according to the index, the wealth of super-rich people controlling expensive beauty product companies has shrunk by 5% since the beginning of the year, and as of Tuesday's close, it has shrunk by about $24 billion. In contrast, the wealth of the other 500 people grew by 13%, or $1 trillion. The last time there was such a big gap between the two groups was in May 2022.

This decline conceals the differences within the entire industry due to factors such as brand recognition and exclusivity. The losers were Betancourt Meyers, Arnault and his arch-nemesis, 87-year-old Francois Pinault. Pinault founded the parent company of Gucci, Kering Group. After French President Macron announced early parliamentary elections, the French companies controlled by these three companies were also hit by investors' alertness to their country, which has resulted in a suspended parliament.

Pessimistic prospects

In the past year, Arnault's wealth has shrunk by $7.4 billion to $200.1 billion, falling behind Tesla CEO Elon Musk and Amazon boss Jeff Bezos. In his more than 30 years, LVMH has 75 brands, including the high-end custom brand Dior, jeweler Tiffany, and Hennessy cognac. The group's sales of fashion and leather products significantly slowed down in the first quarter, with an overall decline in Asia except Japan.

The pessimistic demand prospects for L'Oreal have affected the wealth of 71-year-old Betancourt Meyers. In December last year, she became the world's first woman with a net worth of $100 billion, but her wealth has fallen to about $91 billion. In addition to high-end brands such as Yves Saint Laurent and Lancome, there are also more affordable brands such as Paris L'Oreal, Chanel and Maybelline, which she and her family own nearly 35% of the company, trying to survive in the slowdown of different regions and price markets.

Pinot's wealth has shrunk the most, halving in the past three years to $28 billion, as the problems facing his luxury goods empire are more serious than the slowdown in the Asian economy and the political uncertainty in France. Kering Group, led by his son Francois-Henri Pinault, warned in April that profits in the first half of this year would fall sharply as the company tried to reverse the decline of its largest brand Gucci.

At the same time, there are also some luxury goods billionaires who have successfully increased their wealth during this period, including the Wertheimer brothers behind Chanel, widely regarded as one of the most high-end luxury brands. This minority-owned company posted double-digit growth last year, despite warning that the market was becoming more challenging and demand for its handbags and tweed suits in the Americas was slowing.

John Rupert, the 74-year-old South African billionaire who controls Cartier's parent company Richemont, has also become one of the few winners. Richemont on Tuesday announced that sales of its jewelry brands, including Van Cleef & Arpels and Buccellati, had grown, offsetting a 27% drop in overall revenue in Greater China. Investor relief pushed up the share price, but LVMH, L'Oreal and Kering were not affected, with the companies falling on the Paris stock market on Tuesday. Burberry issued an earnings warning on Monday and plans to replace its CEO, causing panic in the entire industry. Swatch Group also announced a sharp decline in sales and profits, as Swiss watchmakers and other luxury goods companies were impacted by the slowdown in the Asian economy.

Investors breathed a sigh of relief and boosted the stock price, but LVMH, L'Oreal, and Yunji Group were not affected, and these companies fell on the Paris stock exchange on Tuesday. Burberry issued a profit warning on Monday and plans to replace its CEO, causing panic in the entire industry. The Swatch Group also announced a significant drop in sales and profits, as Swiss watchmakers and other luxury goods companies were affected by the slowdown in the Asian economy.