PBI has drawn on WealthInsight’s research to analyse a specific industry which plays a major part in driving high net worth wealth creation. This month PBI looked at Fashion and Luxury goods in France, the USA, UK, Italy and Switzerland.
Wealthinsight’s research combines the retail sector, including supermarkets, high street shops, with the higher end markets of fashion, fashion retail and luxury goods. PBI has extracted the retail sector for this report and concentrated on the wealth of the wealthiest in fashion and luxury goods.
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Luxury goods and fashion is a sector dominated by the high net worth individuals (HNWI) and ultra high net worth individuals (UHNWI) of Western Europe, particularly those of France, Italy and Switzerland.
The sector has been hit by tough conditions since the economic downturn in 2008 as a fall in demand from the traditional markets of the USA and Europe has reduced income to their main company holdings as well as other investments.
Some of this has been offset by the new markets of China, Russia and the other BRICS, but even with this, the wealth of those whose main income comes from the sector has seen minimal or negative growth.
WealthInsight includes retail wealth in its calculations and even with this included only the USA saw any growth in wealth in the sector between 2007 and 2012.
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By GlobalDataWealth in the luxury goods and fashion is expected to see strong growth in the years to 2017 however.
Outside of the focus group of nations, Spain’s Amancio Ortega deserves special mention. His estimated $55.5 billion wealth makes him the world’s wealthiest individual in the sector thanks to his ownership of the Zara chain of fashion retailers and other interests.
Key Geographies
Nations with a reputation for luxury and fashion still dominate the high end of the sector but high street fashion is the strength of the UK and USA.
Conglomerates of luxury goods companies such as LVMH are the reason for France’s domination of the retail, fashion and luxury goods sector. The fashion and retail sector in France accounts for 17.7% of HNWI’s wealth, and it is positioned at number one for French HNWI source of wealth by sector, according to WealthInsight’s report.
The sector in France has suffered in the global downturn and overall wealth has shrunk by 9% since 2007 compared with growth of 18% in the fast moving consumer goods (FMCG) sector. The future looks brighter however with expected wealth growth of over 2% year on year by 2015.
| Name | Wealth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Mr. Bernard Jean Étienne Arnault | 29.7 | Fashion and Luxury Goods | Roubaix, France |
| Ms. Liliane Schueller Bettencourt | 29.3 | Fashion and Luxury Goods | Paris, France |
| Mr. François-Henri Pinault | 13 | Fashion and Luxury Goods | Rennes, France |
In Italy the luxury goods and fashion sector accounts for the second largest source of wealth among UHNWIs after the financial services sector at 12.9%. Among billionaires, four of the top five wealthiest Italians are connected to the fashion industry.
| Name | Wealth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Mr. Leonardo Del Vecchio | 19 | Fashion and Luxury Goods | Milan, Italy |
| Mrs. Miuccia Bianchi Prada | 13.5 | Fashion | Milan, Italy |
| Mr. Giorgio Armani | 8 | Fashion | Tuscany, Italy |
Fashion is the third largest source of wealth in Switzerland behind financial services and manufacturing and has an 8.6% share of UHNWI wealth in the country. Overall their wealth dropped more than any other sector, almost 20%, over the period 2007 to 2012.
Within the luxury goods sector in Switzerland it is the production and sale of watches that provides the greatest source of wealth for the UHNWI.
| Name | Wealth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Mr. Georges Nicolas Hayek Jr. | 2.425 | Fashion and Luxury Goods | Switzerland |
| Ms. Esther Grether | 2.15 | Fashion and Luxury Goods | Basel, Switzerland |
| Mr. Jörg G. Bucherer | 0.8 | Fashion and Luxury Goods | Basel, Switzerland |
In the UK the sector is the fourth most important generator of high wealth with an 8.5% of all HNWI coming from the retail, fashion or luxury goods industry. For UHNWI the sector accounts for the second largest grouping at 9.4% of all UHNWIs.
Unusually for UHNWI in the UK, only a few live in or around London with a large number based in the North East of England or overseas.
Like France, the sector has seen a fall in the wealth of HNWI since 2007 with a net drop in assets estimated at 2%. Those UHNWI with a background in retail and fashion however saw a fall of 24% in their wealth over the same period.
Growth in the sector is estimated at a modest 1.5% year on year to 2015.
The dominant source of wealth in the sector is fashion and luxury good retail rather than production.
| Name | Wealth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Sir Philip Nigel Ross Green | 5.58 | Fashion | Monte Carlo, Monaco |
| Mr. Laurence Graff | 2.53 | Luxury Goods | Gstaad, Switzerland |
| Mr Bernard Lewis | 2 | Fashion | Beaconsfield, UK |
Even with retail included, the retail, fashion and luxury goods sector is only the seventh largest source of wealth for HNWI in the USA.
This equates to 6.7% of the UNHWIs in the country, well behind the leading group of those from financial services at 16.7%.
However the number of billionaires with a background in the sector is higher, at 8.5% which puts them at fourth in the league table of wealth generating sectors.
Retail and fashion was the fastest growing US sector for wealth between 2007 and 2012 with a growth rate of 23% which derives mostly from the retail sector.
Luxury goods and fashion make up only a small part of the total number of the sectors billionaires in the USA with only three of the top ten wealthiest in the coming from this background.
| Name | Wealth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Mr. Philip Hampson Knight | 16.5 | Fashion | Hillsboro, USA |
| Mr. Ralph Lauren | 7.5 | Fashion | New York, USA |
| Mr. Do Won Chang | 4.58 | Fashion | Beverley Hills, USA |
