Demand Boom For Hermes, Dior Propels Luxury Fortunes To $93 Billion

It's no secret that some of the world's richest people are making even more money thanks to a global shopping spree on luxury goods and beauty products. 

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French billionaire Francoise Bettencourt Meyers, the world's wealthiest woman, has been benefited from the spending spree since she turned 69. During the past week, L'Oreal, a makeup and skincare empire founded by her grandfather, reported strong revenue growth which sent its shares to record highs, boosting its fortune to $93.3 billion, a $21.8 billion rise since the beginning of the year. Her fortune reached $93.3 billion on Thursday, a $21.8 billion increase since the beginning of the year.

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Aside from Bernard Arnault, who became the world's richest person in the process of establishing LVMH into a 75-brand juggernaut including Christian Dior, Tiffany & Co., Moet & Chandon Champagne, as well as other fashion houses, she also made gains. The company he controls has grown to sell more expensive handbags, cosmetics and fine wines, fueling stellar returns for Arnault, resulting in an increase of $48.6 billion in wealth in 2023. 

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Another family behind Hermes International, another leading purveyor of extravagance, has experienced a similar jump in wealth in recent months, one of the less known but equally significant jumps in wealth. Hermes' silk scarves and leather goods rival those of LVMH for a wide range of reasons. In October, the sixth-generation clan was worth a reported $157 billion, an increase of $95 billion since then.

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There is a growing amount of wealth being accumulated by the founders and heirs of French companies - an increase of $93 billion this year - and this proves the country’s increasing position in the luxury and beauty industry throughout the world. Besides the Wertheimer brothers, two other family members who have enjoyed a rise in fortune are Francois Pinault, the founder of Gucci-owned Kering SA, and the Wertheimer brothers, who own Chanel - famous for tweed suits and No. 5 perfume — both closely held by the Wertheimer brothers.  

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L’Oreal, LVMH, Kering, L'Oreal’s Women and LVMH’s Men were all created in France and are the largest multigenerational companies in the world. All of these companies have steadily grown, largely as a result of acquisitions over the years, as well as expansion into international markets including China.

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We take a closer look at some of the ultra-rich French families and individuals who have benefited from the growth in demand for personal grooming products and expensive clothes among the well-heeled over the years:

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Francoise Bettencourt Meyers 

A reclusive heiress who is the grandaughter of Eugène Schueller, Vice Chairwoman of the Board of L’Oreal SA, and the granddaughter of Eugène Schueller, Bettencourt Meyers is the eldest member of the company’s board. Almost 35% of the company shares are owned by Bettencourt Meyers, her family, and her sons Jean-Victor Meyers and Nicolas Meyers. 

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A $2.53 billion deal was reached last month between L'Oreal and Aesop soaps, and sales of the soaps will only rise in the future. The company's luxury division sells brands like Lancome, Yves Saint Laurent perfume, Helena Rubenstein, and soon Aesop soaps.

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There is expected to be a full recovery of consumption of beauty products in China in the second half of this year as well as gradual improvement in Chinese travel spending resulting in a stronger top-line for the company," AlphaValue analyst Jie Zhang noted in a report.

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Bernard Arnault

It was only last year that the 74-year-old, a discreet man of 74, achieved the world’s largest fortune by being ranked at the top of Bloomberg wealth rankings, becoming the first European to claim to have such a fortune. LVMH has been making a steady increase in sales this month, as well as placing itself in the top 10 ranking of all companies worldwide in recent months, and he has been consolidating his lead over Elon Musk.

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Arnault's reputation at home has been affected by the focus on his wealth. The company's Paris headquarters was briefly seized by protesters waving flares ahead of a demonstration against the controversial pension reform proposed by President Macron earlier this month. Opponents of the reform targeted the company as a symbol of capitalism because of its size and scale. 

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The Hermes Family

As of this year, approximately 67% of Hermes International, which was founded in 1837 by Thierry Hermes, is controlled by six generations of family members. In October, the clan was ranked fifth on the list of world's richest families at a time when many dynastic fortunes have evaporated. Before the 38% jump in shares of the luxury handbag maker, the demand for its Birkin and Kelly handbags sparked an increase of almost 38% in the company's stock price.

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The company is still owned and operated by its descendants, with Axel Dumas serving as the executive chairman and Pierre-Alexis Dumas serving as artistic director, respectively, and Eric de Seynes as the chairman of its supervisory board. Henri-Louis Bauer, who is a member of the Bauer family, holds the position of president of Emile Hermes SAS.

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Francois Pinault

Since the beginning of this year, Kering’s 86-year-old founder has seen his fortune grow by 24% to $44.3 billion. The controversy that has resulted from a Balenciaga advertisement campaign, one of the company’s more than half a dozen labels, is partly to blame. Last year was a good year for Yves Saint Laurent, which saw a strong performance in comparison to Gucci. 

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A year after taking over the role of chairman and CEO of Kering, Pinault’s son, François-Henri Pinault, expressed dissatisfaction with Kering’s performance. Kering reports quarterly results on April 25. A number of companies are owned by the Financière Pinault family, including Christie's, a contemporary art collection, vineyards, the cruise line Compagnie du Ponant, and the French weekly magazine Le Point. The family also has a holding company, Financière Pinault. 

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Alain and Gerard Wertheimer

There has been an increase in spending on luxury goods that includes the sought-after flap bags, jewelry, and makeup of the fashion house. The secretive French brothers, who own Chanel, have also benefited from the boom. Bloomberg's wealth index indicates that their net worth has increased by 16% this year to $100.5 billion, which is more than double the previous year.

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As far back as 2018, Chanel, headquartered in London, has only published annual financial accounts in 2018 in the Cayman Islands. Their holding company, Mousse Investments Ltd., is based there, but their family office, Mousse Partners, is run by Charles Heilbronn, who has been running the firm for two decades. To assist in taking the bank private, the firm is making a substantial investment.