Richemont, a Switzerland-based luxury goods conglomerate led by South Africa’s richest man Johann Rupert, has seen its shares fall by a single digit from last week’s market closing price after a swath of COVID-19 cases struck South Korea and China.
The recent drop in the share price of Rupert’s luxury goods company prompted his net worth to fall below $10 billion, with the billionaire losing more than $286 million in a single day.
Since the start of trading this week, the market price of Richemont’s shares has fallen from R182 ($12.13) to R175 ($11.66), resulting in a total loss of 3.85 percent for the shareholders.
The decline in the share price of the luxury goods holding can be linked to China’s recent COVID-19 lockdown, which adds to growing concerns about the company’s sales and earnings just a week after it ceased commercial operations in Russia.
The decision by investors and other market participants to sell down shares in Richemont is linked to the company’s operations in Asia, which experts believe will be impacted by the most recent Shenzhen lockdown, a decision that is well in line with the Chinese government’s “zero tolerance” COVID-19 policy.
Richemont’s operations in China and South Korea generated a combined revenue of €3.26 billion ($3.6 billion) in the first half of its 2022 fiscal period, compared to a total of €8.91 billion 9 ($9.81 billion) generated by its operations across four continents.
The breakdown revealed that its Chinese operations generated a total of €2.79 billion ($3.1 billion), while its operations in South Korea generated €472 million ($519.8 million).
With luxury demand in January and February at projected levels, analysts predict that the coming months will be tough in terms of sales and earnings for the luxury goods firm if lockdowns in larger luxury hubs such as Shanghai linger into March.
Rupert’s net worth has fallen below $10 billion as a result of the recent slide in Richemont shares; the billionaire businessman derives a total of $6.67 billion from his 9.14-percent interest in the firm.
Since the start of 2022, his net worth has fallen by more than $2.3 billion, from more than $12 billion on Jan. 1 to $9.65 billion at the time of writing this article. Despite a recent fall in his fortune, the South African billionaire remains the country’s richest man, ahead of Nicky Oppenheimer, who is currently worth $8.35 billion.
