The ultra-wealthy owners of some of the world’s biggest luxury brands took a hit to their fortunes on Tuesday.
The decline in LVMH and Kering’s shares led to a decline in the value of Bernard Arnault and Francois Pinault’s shares.
Luxury stocks fell after China’s economic planners failed to provide details of a stimulus package.
The billionaires behind some of the world’s most iconic fashion brands took a hit to their fortunes on Tuesday as disappointed investors dumped their luxury stocks.
Bernard Arnault, founder and CEO of LVMH Moët Hennessy Louis Vuitton, owns nearly 49% of the parent company of Dior and Sephora, according to filings. LVMH shares fell as much as 7% on the Paris market on Tuesday, reducing the value of his holdings by about $13 billion, before limiting the decline to 3%.
Mr. Arnault ranks as the fourth-richest person in the world with a net worth of $197 billion as of Monday’s market close, according to the Bloomberg Billionaires Index. A few months ago, he was the richest person on the planet, but LVMH shares have fallen 11% this year due to weak demand for luxury goods in China, reducing his fortune by more than $10 billion.
One of only two people on Bloomberg’s richest list to have lost more money this year is Arnault’s biggest rival, François Pinault, Gucci founder and Balenciaga owner Kering.
Kering shares plunged as much as 8% on Tuesday, cutting the decline to 5% after wiping the value of about 41% of Pinault’s shares by more than $1 billion. Mr. Pineau was ranked 83rd in terms of wealth, with assets of $24 billion as of Monday’s close, down more than $11 billion this year.
Other luxury brands suffered similar declines, and the fortunes of their largest shareholders shrank. For example, the Dumas family owes most of its estimated $150 billion fortune to Hermès stocks, which fell 3% on Tuesday.
The family of former Richemont CEO Johann Rupert derives most of its $14 billion fortune from the company that runs Cartier and Piaget, which has fallen 3%.
Moncler CEO Remo Ruffini isn’t rich enough to feature on the Bloomberg index (the person at the bottom is worth about $6.4 billion), but Forbes magazine puts his net worth at 3.4 billion. It is valued at $1 billion. The ski jacket maker’s shares also fell 3% on Tuesday.
Chanel is not publicly traded, but co-owners Alain Wertheimer and Gerard Wertheimer were each worth about $46.6 billion as of Monday’s close, according to a Bloomberg listing. It probably should be worth less now, considering the valuations of many other luxury brands fell on Tuesday.
The sell-off came after China’s economic planner held a press conference but did not reveal details of the economic stimulus package. Promises to lower interest rates, ease banking regulations, support liquidity and even create an equity stabilization fund boosted markets around the world.
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