Chang­ing tastes whip­saw fash­ion for­tunes

New con­sumer be­hav­iours also re­order­ing the rank­ings for bil­lion­aires

The Star Malaysia - StarBiz - - Foreign News -

LON­DON: Bernard Ar­nault and Aman­cio Ortega are both ma­jor share­hold­ers of multi­na­tional fash­ion busi­nesses, and the only Euro­pean cit­i­zens to­day with more than US$50bil to their names.

Their for­tunes, though, are di­verg­ing amid grow­ing de­mand for lux­ury goods and low growth among fast-fash­ion re­tail­ers.

Ortega, 82, the Span­ish founder of Zaraowner In­di­tex SA, has seen his wealth drop by more than 7% this year to US$69.7bil, in­clud­ing a US$3.5bil fall on Wed­nes­day, ac­cord­ing to the Bloomberg Bil­lion­aires In­dex.

Ar­nault, 69, chair­man of Paris-based lux­ury goods-maker LVMH, is worth US$79.3bil, af­ter a 25% in­crease in 2018, which saw him over­take Ortega as Europe’s rich­est per­son.

Fu­elled by de­mand from China, the lux­ury goods mar­ket will grow as much as 8% this year to 281 bil­lion eu­ros (US$329bil), ac­cord­ing to a June re­port from Bain & Co.

Fash­ion re­tail­ers with brick-and-mor­tar shops like In­di­tex face more com­pe­ti­tion from on­line ri­vals as con­sumers feel more com­fort­able re­ceiv­ing clothes at home.

“For mass-mar­ket fash­ion, the peak mar­gins are in the rear-view mir­ror,” said Charles Allen, a se­nior an­a­lyst with Bloomberg In­tel­li­gence. “With the lux­ury brands, the mar­gins seem more re­silient.”

Shares of In­di­tex tum­bled 5.7% on Wed­nes­day, the most in more than six months, af­ter Mor­gan Stan­ley an­a­lysts Geoff Rud­dell and Amy Curry cut their rec­om­men­da­tion on the stock to “un­der­weight”, the equiv­a­lent of sell.

“In­di­tex is still a world-class re­tailer, but its in­vest­ment propo­si­tion has been weak­en­ing for some years,” the an­a­lysts wrote.

Chang­ing con­sumer tastes and be­hav­iours are re­order­ing the rank­ings for other bil­lion­aires.

Gior­gio Ar­mani, the founder of his epony­mous Mi­lan-based fash­ion house, has added 11% to his for­tune this year.

The wealth of Stefan Pers­son, the largest share­holder of In­di­tex ri­val Hennes & Mau­ritz AB, has tum­bled 25% to US$14.6bil, ac­cord­ing to the Bloomberg in­dex. Philip Green, ma­jor­ity owner of Ar­ca­dia Group, the UK’s largest closely held cloth­ing re­tailer, has seen his for­tune slide al­most 9% to US$2.9bil.

“While fast fash­ion had a huge run ob­vi­ously, lux­ury is re­ally com­ing back,” JanHen­drik Schlottmann, chief ex­ec­u­tive of­fi­cer of New York-based fash­ion house Derek Lam In­ter­na­tional LLC, told Bloomberg TV in May. “Young wo­man are much more knowl­edge­able about qual­ity.” — Bloomberg

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.