- Vivian Hendriksz |
Business Intelligence London - The fashion industry may be an ever-changing industry, but one aspect has remained constant over the past decade - the influence of fast-fashion retailer Zara. The man behind the world’s leading fashion company Inditex, Amancio Ortega, transformed the industry’s mass-market model for good with the launch of his famed fast-fashion chain and secured his place as the wealthiest man in the industry. Currently ranked as the richest man in the fashion industry, and the 4th wealthiest man in the world, Ortega holds a net worth of 71.3 billion US dollars in 2017 - which is close to 30 billion US dollars more than the second richest man in fashion, Bernard Arnault.
FashionUnited’s Top 10 Wealthiest People in Fashion 2017
Known as the man behind luxury goods group LVMH, Arnault is also an avid art collector, as well as CEO of the company and the wealthiest man in France, with a net worth of 41.5 billion US dollars. The success of both these entrepreneurs underlines the potential success offered by the industry’s lower-end and higher-end of the market. But which other business men and women have made their fortunes in fashion? Who saw their net worth rise, and who saw their worth decline in 2017? FashionUnited takes a closer look at the top ten richest people in fashion, and their net worth over the years in the charts below, based on FashionUnited’s Top 100 Index, published on June 26, 2017.
The Top 10 Wealthiest People in Fashion in 2017
The annual Net Worth of the Top 10 Richest People in Fashion 2017
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Photo left to right: Amancio Ortega, by http://www.signalng.com/ [CC BY-SA 4.0 ( http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons
Bernard Arnault, by Jérémy Barande / Ecole polytechnique Université Paris-Saclay, via Wikimedia Commons
- Prachi Singh |
The Hermes Group's consolidated revenues amounted to 2,713 million euros (3,161 million dollars) in the first six months of 2017, up 11 percent at current exchange and 10 percent at constant exchange rates. The company said, group's stores posted an 11 percent increase in sales, in all the geographical areas and growth was also sustained in the second quarter with 9 percent rise at current exchange and 8 percent at constant exchange rates.
Hermes reports sales growth across geographies
During the first six months, the company said revenue rose in all the geographical areas worldwide. Sales in Asia excluding Japan increased 14 percent, driven particularly by continental China. Japan posted a 3 percent revenue rise, despite the strengthening of the yen. Sales in America improved 9 percent, while Europe reported a 7 percent increase benefitting from store openings and extensions in Rome in October, and London and Munich in March. France, Hermes said posted a good increase in group stores.
12 percent sales growth in leather goods and saddler, the company said, was sustained due to the collections and the diversity of models. The development was supported by the sustained pace of production and the increase in capacities at the three new sites in Charente, Isère and Franche-Comté. In June, the group opened two new production sites, the Maroquinerie de Normandie and the Ganterie-Maroquinerie in Saint-Junien.
The ready-to-wear and accessories division posted 10 percent sales rise, driven by the success of the ready-to-wear collections as well as jewellery accessories and shoes. The silk and textiles business line saw 6 percent sales increase.
The perfumes division witnessed sales growth of 8 percent, while the revenues of watches business line decreased by 1 percent, penalised by a still challenging market, but showed a slight upturn in the second quarter. Other Hermès business lines improved 13 percent, which encompass jewellery, Art of Living and Hermès table arts.
- Vivian Hendriksz |
Business Intelligence It is no big secret that Amancio Ortega, the man behind fashion giant Inditex, is the richest man in the fashion industry. Currently ranked as the 4th richest man in the world, the Spaniard is worth 71.3 billion US dollars - 15.3 billion US dollars more than Mark Zuckerberg, founder of Facebook, according to Forbes's Billionaires list. Ortega has managed to hold onto his ranking as the wealthiest man in the global fashion industry for a number of years, thanks to the runway success of his fast-fashion model Zara.
But Ortega is certainly not alone in carving out a fortune in fashion. Take Bernard Arnault for example, the man behind luxury conglomerate LVMH. Arnault saw his overall net value jumped from 33.9 billion US dollars in 2016,to 41.5 billion US dollars in 2017, thanks to the acquisition of couture house Christian Dior. In fact, there has been an increasing number of individuals making a fast buck - or quick billion - in fashion over the past year. But which fashion entrepreneurs have seen solid boost in their fashion emporiums and net value over the last year? We take closer look at three leading people in fashion, who saw a significant increase in their net worth in 2017, according FashionUnited’s Top 100 BI list, published on June 26.
Anders Holch Povlsen - Bestseller
Percentage increase from last year: 57.50%
Position on the list: 18
First up we have Anders Holch Povlsen, who is the owner and CEO of leading fashion retail group Bestseller. Known for its wide array of high street fashion chains, such as Jack & Jones, Vila and Vero Moda, the international family-owned company owns 20 individual fashion brands. Bestseller is present in more than 70 markets across Europe, the Middle East, North America, Latin America, Australia and India. Currently operating 2,700 branded chain stores across 38 markets around the world, in addition to 15,000 concessions, Bestseller rapidly expanded from the single store Povlsen parents opened in Ringkobing, Denmark in 1975.
Povlsen’s increasing net worth is linked to Bestseller growing sales, which reported a turnover of 3.5 billion US dollars in FY 2015/16. However, Povlsen also holds significant stakes in online fashion retailers Zalando and Asos, which continue to perform well. Bestseller remains the largest shareholder in British e-commerce platform Asos, holding a 29.16 percent share, in addition to a 10 percent stake in German Zalando. In addition, Povlsen also owns more than one percent of all the land in Scotland, through Wildland, a non-profit organisation the entrepreneur set up in order to purchase natural land and protect it.
Michel Leclercq - Decathlon
Percentage increase from last year: 16.67%
Position on the list: 26
Michel Leclercq, founder of Decathlon, is another significant riser on this list. Leclercq first opened a small sportswear store in 1976, under the name Decathlon. Since then the sportings good chain has grown into one of the world’s biggest athletic retailers. With more than 900 stores around the world, Decathlon employs 60,000 people in 27 countries. The retailer, which offers a wide array of athletic wear, equipment and outdoor gear, opened its debut store during the boom in sporting federations and clubs, in the car park of the Auchan shopping centre in Englos.
Decathlon has seen a steady increase in sales since 2009, as consumers continue to invest in health, fitness and overall well-being. Therefore, it should come as little surprise that Decathlon reported a turnover 11.5 billion dollars before tax for FY16. In addition, Leclercrq, who holds a 40 percent stake in Decathlon, is the cousin of Gerard Mulliez, the patriarch of the famous French retail dynasty, so his success in the industry should come as no shock. Leclercq and his immediate family own 40 percent of the sporting goods company, while the extended Mulliez family hold another 40 percent.
Bernard Lewis - River Island
Country: Great Britain
Percentage increase from last year: 27.78%
Position on the list: 57
Bernard Lewis, the man behind Chelsea Girl, better known today as River Island, has enjoyed a 27.7 percent increase in his net worth over the last year. Lewis first started out in the industry selling knitting wool from The Wool Shop from an East London bomb site. He went on to launch his own store, under the name Lewis Separates, before rebranding under the name Chelsea Girl in 1965, and later on in 1988 as River Island.
Counting more than 350 stores around the world, with franchises in Europe, Asia and the Middle East, the high street fashion chain has managed to successfully tap into millennials shifting needs and keep pace with the changing trends. River Island achieves more than 1 billion US dollars in annual sales, and is overseen by Ben Lewis, Bernard Lewis’s nephew who first started out working in the company as a store manager in 1990. Ben Lewis has served as River Island CEO since 2010.
Honourable Mention: Sefik Yilmaz Dizdar
Position on the list: 98
New Entry in 2016 List
Sefik Yilmaz Dizdar, the man behind Turkey’s LC Waikiki deserves an honourable mention, as 2017 marks the first time he has been listed in FashionUnited’s Top 100 list. A manufacturer and retailer of ready-to-wear fashions and home items, LC Waikiki has set itself an admirable goal - to become one of the three most successful brands in Europe by 2023.
Founded by French designer Georges Amouyal and his partner in France in 1988, Yilmaz Dizdar and his partners, which include billionaire Mustafa Kucuk, acquired the fashion-lead business in 1997. Afterward, Yilmaz Dizdar and his partners decided to develop their own store chain to sell their products. Since then LC Waikiki has expanded to count over 750 stores in 36 countries including the Middle East and Southeast Asia, generating more than 2 billion US dollars in sales last year. Mustafa Kucuk's brother, Vahap Kucuk, is CEO and spokesman of LC Waikiki.
Homepage photo: via Pexels
- Prachi Singh |
Second quarter net sales at Skechers increased 16.9 percent to 1.026 billion dollars, which the company attributed to a 6.4 percent increase in the company’s domestic wholesale business, an 18.6 percent increase in the company’s international wholesale business, and a 28 percent increase in its company-owned global retail business, which included comparable same store sales increases of 7.1 percent. Gross profit for the quarter was 488.3 million dollars, or 47.6 percent of net sales, compared to 416.3 million dollars, or 47.4 percent of net sales, for the same quarter last year.
“Second quarter net sales exceeded our expectations setting another record quarter, and making the first half of 2017 a new record with sales surpassing 2 billion dollars,” said David Weinberg, COO and CFO of Skechers in a media statement.
Review of the second quarter results
Earnings from operations were 86.3 million dollars or 8.4 percent of sales, a decrease of 14 percent over the second quarter of 2016. Net earnings decreased 19.7 percent to 59.5 million dollars, and diluted net earnings per share were 0.38 dollar.
The company said, general and administrative expenses for the second quarter increased 62.1 million dollars to 305.3 million dollars due to Skechers’ focus on long-term global growth, including 22.3 million dollars associated with the Company’s 68 additional domestic and international retail stores—31 of which were opened in the second quarter, and 26.2 million dollars to support its international growth, of which 16.9 million dollars was due to increased costs in China, 3.6 million dollars for the transition of its South Korean distributor to a joint venture, and 2.4 million dollars in Japan.
Highlights of the six month financial performance
Net sales for the fist six months, were 2.099 billion dollars and gross profit was 964.8 million dollars or 46 percent of net sales, and earnings from operations were 210.7 million dollars or 10.0 percent of net sales. Net earnings were 153.5 million dollars and diluted net earnings per share were 0.98 dollar per share.
Commenting on the positive trading, Robert Greenberg, Skechers Chief Executive officer, said: “In the international markets, we achieved double-digit growth in many countries worldwide—including Germany, Chile, India, China, and Australia. Skechers retail stores around the world now include 1,870 international stores of which 1,691 are third-party-owned locations. At quarter end, our total Skechers retail store count was 2,305, and included the opening of several key locations—Tokyo’s popular Shibuya district, the new Century City Mall in Los Angeles, a super store in Ontario Mills in Southern California, a store in New York’s SoHo, among others—and the relocation of our store on San Francisco’s Powell Street.”
Expects global sales to boost Q3 results
Based on these key indicators, the company believes it will achieve net sales in the third quarter in the range of 1.050 billion dollars to 1.075 billion dollars, which would represent a third quarter sales record, and earnings per share of 0.42 dollar to 0.47 dollar. This projection includes flat sales increases in the Company’s domestic wholesale business, and double-digit increases in its international wholesale business, and its global company-owned retail stores.
“Based on our global meetings in May and June, and our on-going domestic key account meetings at our corporate offices, plus our July sell-throughs, we believe that the record sales we experienced in the first six months will continue in the second half,” added Greenberg.
The company expects its capital expenditures for the remainder of 2017 to be approximately 35.0 million to 40 million dollars, which includes corporate office upgrades and an additional 35 to 40 company-owned retail store openings and several store remodels.
- Angela Gonzalez-Rodriguez |
Inditex CEO Pablo Isla has unraveled the keys to the future of the world's largest fashion retailer: "solid, sustainable and integrated" growth that revolves around a business network model that integrates traditional stores and online sales.
On Tuesday, Inditex held its General Shareholders' Meeting, an opportunity that the CEO of the company took advantage of to explain the group's sustainable growth strategy, a strategy that starts with Inditex's conception as a corporation that "generates social and environmental value".
During his speech, Isla highlighted the "solid and sustainable growth" of the company in 2016 and defined Inditex as a company dedicated to its people and creative talent and supported by an integrated model of physical and online stores.
A good example of Inditex's growing interest in further refining its sustainability-based growth model is its 'Closing the Loop' program for the reuse and recycling of textile products. This initiative has enabled the collection in one year of more than 7,100 tons of garments, footwear and accessories through containers in stores, offices, and logistics centers.
In addition, the shareholders who met at the company's headquarters in Arteixo approved the group's performance in 2016. Last year, Inditex surpassed the 7,200-point mark in 93 countries, operating its online stores in 41 markets.
Inditex pays dividend 13 percent higher than a year ago
The group's revenue reached 23,310 million euros, driven by growth in all regions in which the group operates. The profit amounted to 3,160 million euros.
Inditex will pay its shareholders a dividend of 0.68 euros per share, equivalent to 2,117 million euros depending on the current number of shares entitled to receive it, up 13.3 percent year-on-year. Dividend has risen 89 percent in the last five years.
Thus, the founder and main shareholder of Inditex, Amancio Ortega, will be paid 1,256 million euros as dividends of the company, compared to the 1,108 million euros that he received for this same concept last year.
Photo:Inditex Web, Spain
- Angela Gonzalez-Rodriguez |
H&M has posted its very last monthly sales report in June. From now on, the Swedish fast-fashion giant will not issue monthly sales reports, breaking with a 10-year long tradition.
"A month is far too short a period over which to assess how sales are developing," H&M said in a statement. "Instead, sales development should be viewed over a longer period of time, such as over a season or a quarter."
The company said it would no longer publish monthly sales data, and instead report quarterly data ahead of its interim reports to align itself more with how other fashion retailers report sales figures.
”A month is too short a period to assess sales development” at H&M
"The reasoning is that a month is far too short a period over which to assess how sales are developing; in fact, a single month's sales can actually be misleading, since calendar and weather effects--among other things--may significantly affect the outcome," it said.
This is not the first time H&M changes its reporting, pushed by an increasing competition from main rival Zara or other players including Forever21 or Mango. In fact, H&M dropped like-for-like figures from its monthly releases in 2014.
"Instead sales development should be viewed over a longer period of time, such as over a season or a quarter. This is also the reason why the majority of companies in fashion retail currently report their sales quarterly rather than monthly."
H&M’s decision welcome by shareholders, raises some questions amongst analysts
Market sources quoted by ‘Money Control’ point out that this decision might respond to the retailer’s frustration due to how the market seems to have lost confidence in the company. “The fundamental problem is not monthly data, it's the company's weak development,” same sources said, further adding that "Monthly data was not a problem when the company performed well. Why should it be now?"
In this regard, it’s worth recalling that H&M shares have been down since 2015, underperforming the market and falling short from Zara’s owner Inditex’ stock. H&M shares lost 18 percent of their value in the past year alone.
To make it up for the cancellation of monthly sales updates, the company announced it would begin to hold capital markets days (what they haven’t done since the firm’s listing in 1974) to provide "more in-depth information about the business".
To date, reactions to the re-enactment of these dates have been positive, with the company’s leading shareholder, pension fund AMF, welcoming the plans for capital market days. Anders Oscarsson, head of ownership at AMF, pointed out that dropping monthly sales publications was fine, adding that the fund remained a long-term investor in H&M.
Image:H&M UK Web
- Angela Gonzalez-Rodriguez |
ANALYSISAfter announcing it was putting itself up for sale, high-end shoemaker Jimmy Choo has started to receive serious interest from potential new owners. News reports point to Michael Kors and Hony Capital as the first bidders.
As reported by ‘Sky News’, Michael Kors would have indicated that it will table an indicative bid for Jimmy Choo, ahead of a deadline later this month. Meanwhile, Hony Capital, the Chinese private equity firm which owns PizzaExpress, is also thought to be likely to make an offer, as is CVC Capital Partners, the former owner of Debenhams and Formula One motor racing.
Another source close to the matter said on Friday that Hony Capital had been holding discussions with Interparfums, the French fragrances group which holds the licence to manufacture Jimmy Choo-branded perfumes, about a joint bid for the company.
Michael Kors is said to be working with JP Morgan on its bid
It’s worth highlighting that the American retailer of high-end clothing and accessories is not going through its best moment, having to cut sales and profit forecasts earlier this year amid declining consumer footfall in US shopping malls.
In this regard, MKM analyst Roxanne Meyer pointed out in a recent market report that Kors might be focusing on the wrong things as it tries to get back on track. “At the core, it’s an innovation problem,” Meyer writes, citing a “slow pace of innovation” at the company, which already doesn’t have enough exposure to “mini bags” and more feminine styles. The company is instead pivoting more toward apparel, shoes, and men’s items, which are also less profitable than handbags, according to Meyer.
But Michael Kors hasn’t been the only luxury fashion heavy weight showing interest in acquiring Jimmy Choo. Back to May, Coach was rumoured to be in the running to takeover Tamara Mellon’s brainchild.Furthermore, the fact that long-time rival Coach ended up bagging its also coveted Kate Spade earlier this year nothing but added to Michael Kors’ struggles.
In the meantime, Jimmy Choo, said at a trading update last month it was making "excellent progress, trading strongly in the year to date". On this note, the firm added that the fragrance licence managed by Interparfums was "performing particularly well".
Despite Jimmy Choo’s strong commercial performance and brand awareness, there have been concerns about its performance as a public company, with its sales and profit performance disappointing many analysts and investors, point out market sources.
Jimmy Choo has been looking for a buyer since April
In late April, JAB, the German billionaire Reimann family's investment vehicle, revealed its plans to let its luxury holdings go, putting shoemakers Jimmy Choo and Bally International up for sale to focus on the food and beverage operations.
Jimmy Choo’s decision to put itself up for sale was strongly backed by the Board of Directors and its namesake designer and company’s founder, who said to be “supportive of the sales process.”
Back then, the company founded by designer Jimmy Choo and former Vogue accessories editor Tamara Mellon said it was considering a potential sale to "maximise value for its shareholders."
Already in April, Jimmy Choo said Britain's Takeover Panel has agreed that any talks with third parties can be conducted within the context of a "formal sale process". That enables talks with interested parties to take place on a confidential basis. The sale process will be run by BofA Merrill Lynch and Citigroup.
Under UK takeover rules, any agreement to purchase the JAB stake would trigger a mandatory offer for the rest of Jimmy Choo's shares, highlighted sources cited by ‘Sky News’.
Jimmy Choo had a market value of just under 780 million pounds during Friday trading in London.
Photo Credits:Jimmy Choo Official Web
- Angela Gonzalez-Rodriguez |
The fashion technology start-up, which allows users to virtually try on clothes before buying them, has raised 10 million pounds in a Series B funding round led by Hong Kong based retail group TAL Apparel.
This 10 million pounds cash injection has taken the total investment in Metail up to 22.5 million pounds and, according to ‘The Sunday Times’, TAL Apparel, one of its existing investors, has been leading this Series B investment round.
The Hong Kong-based clothing manufacturer also led the 2014 funding round. Metail had already raised 12.5 million pounds since its foundation in 2008.
After closing this round, Metail’s founder Tom Adeyoola no longer holds a majority stake in the business.
TAL investment in Metail confirms consumers’ preference shift towards online shopping
Metail was launched in 2008 by entrepreneur Tom Adeyoola to enables shoppers to “try on” fashion online by creating a bespoke 3D model of themselves, called ‘Memodel’. This virtual fitting technology is embedded into online retailers’ websites.
"We're looking at a future where we see retail moving towards consumer tech businesses, and the increasing digitisation of fashion," says Adeyoola. "As the traffic moves from the high street to time spent on a phone, consumer engagement is increasingly important," he says.
"Metail has some of the most advanced technology in this area, and their unique dataset leads to a number of transformative applications for the whole garment supply chain, ultimately leading to clothes that fit the customer better," said Delmen Lee, president and CTO of TAL, reported ‘Business Insider’.
In agreement with Lee is Caroline Rush, CEO of the British Fashion Council, who in comments gathered by ‘The Sunday Times’ pointed out how “Metail's technological approach to solving the sizing dilemma faced by retailers and customers alike is changing the traditional face of the fashion industry.”
As advanced by both parties in a corporate release, the virtual fitting room provider will use the fresh injection of cash to help scale its international operations. Adeyoola says the business, which has a global customer base including brands such as House of Holland in the UK and Princess Polly in Australia, will now look to branch into menswear.
Metail presents customers with a simulated version of themselves that takes into account their size and weight. It aims to reduce the number of returns customers make for online purchases and provide a generally enhanced customer experience.
Over the next 18 months the team plans to expand its customer base (currently set at 7.7 million users) and to develop partnerships and new features. Conscious of the unstoppable rise of menswear, Adeyoola says he is planning to launch a men's service at the end of the year.
Based in Hong Kong, TAL Apparel is reported to manufacture one in six men’s dress shirts in the USA, informs ‘Tech City News’.
Image:Metail Web_App Demo