The richest man in South Africa and the second richest man in Africa, Johann Rupert, has seen a significant $3.7 billion decline in his net worth during the past 90 days.
The Times reported that the 73-year-old business tycoon had a net worth of $14.4 billion as of July 14, 2023, but his wealth has suffered and is currently down by a huge 25.6% to $10.7 billion.
Rupert’s sudden shift in wealth is closely related to the continued uncertainty around the performance of the luxury goods sector.
The significant decrease in the market value of his 10.18% share in Richemont, the renowned Swiss luxury company celebrated for its iconic brands such as Cartier, Montblanc, and Van Cleef & Arpels, is the key driving force behind this spectacular turn of events.
Richemont’s shares, which are traded on the SIX Swiss Exchange, have fallen noticeably by 31.2% over the last three months.
The market value of Rupert’s Richemont holding fell to less than $7.2 billion as a result of this decline, which caused the company’s market capitalization to fall below the CHF55 billion ($60 billion) barrier.
The slowdown in the luxury market has been made worse by China’s economic difficulties, which had been a key factor in the sector’s success in recent years but are now dealing with weak economic development, high youth unemployment, and instability in the real estate market.
Furthermore, the U.S. market has presented challenges for LVMH and Richemont.
According to Forbes, Richemont’s first-quarter revenue in the Americas decreased by 2%, while LVMH’s second-quarter sales only decreased by 1%. These were the only geographical markets where they encountered problems, though.
Both LVMH and Richemont ascribed their subpar performance in the United States to a specific group of customers known as “aspirational consumers.”
In contrast to true luxury customers who can afford premium goods, these people stick to the lower end of their price ranges for purchases.
