Anybody can be a billionaire (provided that a nearly incalculable number of beneficial factors fall his or her way). But to make Forbes’ World Billionaires List in the retail industry takes a special kind of businessperson, given that it is average consumers, after all, who ultimately hold the key to their brands’ successes (and failures).
SHUTTERSTOCK*Remember that show, “Who Wants To Be A Millionaire?” References, huh? They sure are something.
How many retail moguls made Forbes’ The World’s Billionaires List this year? Of the 1,810 billionaires named to the list, 345 of them earned their fortunes (or at least part of them) in retail. In a recent article, Forbes itself took a look at some of the top retail players who made the annual list and the brands they’ve helped to build.
Now, we dive deeper still to try and figure out what, besides the shock value of all those zeros, these billionaires and their position on the world economic stage could mean for the future of retail.
Fast fashion had a big showing on the Billionaire’s List, with Amancio Ortega, the Spaniard who created Inditex (parent company of Zara), claiming the top rank. Ortega’s worth is valued at an astonishing $67 billion, putting him at the number two richest man in the world, trailing long-reigning champ Bill Gates by just $8 billion. If he were to oust Gates, as the Forbes article points out, he would be the first retailer to claim the number one position.
What might be even more impressive than that (and that is pretty impressive) is that Ortega has nearly double the wealth of the next retail billionaire on the list: Liliane Bettencourt, who owns a sizable stake in women’s cosmetics brand L’Oréal. Bettencourt’s fortune stands at $36.1 billion, a tiny sum only in the shadow of Ortega’s immense wealth.
While Zara has dominated the retail market with affordable clothing that cycles through designs multiple times a season and appeals to a new kind of fashion consumer who wants to update her looks often and on the cheap, the company seems to get its consumer more so than perhaps any other retailer in its space. Take, for example, the recent announcement of an “ungendered” line of clothing now being offered on Zara’s website. Just another example of the brand doing what has mystified so many other retailers in recent years: connecting with millennials.
But Zara and Ortega are not the only fast fashionistas to make the list. Stefan Persson, whose father founded H&M in 1947, also made the list (number 32). Persson served as H&M’s CEO for 16 years before turning over the reins to his son, Karl-Johan (also a billionaire), in 2009.
Along with fast fashion, luxury retail executives also claimed their fair share of spots on the list. Bernard Arnault makes the elite top 20 billionaires and earned his fortune as CEO of LVMH, overseeing 70 luxury brands, including Bulgari, Louis Vuitton and Fendi. As the Forbes article notes, much like Bettencourt’s father (who founded L’Oréal), Arnault built his fortune in France and today is worth $34 billion. A key to his brand’s success? High-profile spokesperson relationships with top celebrity talent, including actress Michelle Williams and fashion/reality star Kendall Jenner.
Not to undo what, at this point, seems like tradition, three of Sam Walton’s children, heirs to the Walmart fortune, again made the list. Walmart’s stock has fallen by a quarter over the past year, the sharpest decline in 25 years for the brand. This begs the question: Would the Waltons bail out their own company if it were to come to that? Those are certainly some deep pockets (the collective depth of which is $98 billion), but the retail giant is far from dire straits. Walmart has faced a bevvy of woes contributing to its decline, including increased competition on the eCommerce front from the likes of Amazon, Jet.com and Alibaba. Now, Walmart also faces an increasingly expensive workforce and the challenge of constantly needing to shift sourcing to cheaper and cheaper manufacturers to maintain its margins.
For now, the Waltons maintain their places on the list, but their seat as one of the golden brands of discount retail may be up for grabs by the digital competition.
Walmart’s decline, as well as Zara’s rise to dominance, demonstrates the effect that opposite sides of the same coin have been having on the retail industry. The shifting buying behaviors of consumers, from brick-and-mortar to online and now to omnichannel commerce, have forced retailers to stay agile and adaptable to new ways of interacting and transacting with their prospective customers.
The changing generational attitudes of shoppers has also contributed to sweeping changes in the industry. What Generation X clamored for in the early aughts, the millennials now scoff at. Experiences are valued over material goods, and status symbol retail items of the past are quickly being replaced by a more subdued fashion brand presence.
By amassing such astronomical wealth, these individuals, who help to steer the mighty ship of retail, have certainly insulated themselves against the changing winds, but their place among the elite is not guaranteed to remain secure. While their personal wealth may be firmly in hold, the brand that helped to get them to their current cushy seats at the top ultimately remain in the hands of their consumers.
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