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Similarly to how French billionaire Bernard Arnault, owner of LVMH, the world’s largest maker of luxury goods, saw his wealth plummet by billions of dollars last month, South African billionaire Johann Rupert, chairman of Richemont, one of the world’s leading luxury goods holdings, also saw his wealth plummet by $890 million in April.
The $890-million drop in his net worth in April brought the year-to-date decline in his net worth to more than $1.89 billion, representing 15.8 percent of his net worth at the start of the year. His net worth has dropped from $11.9 billion at the start of the year to $10.01 billion at the time of writing this report.
In April alone, his net worth fell from $10.9 billion at the beginning of the month to $10.01 billion at the end of the month, a total loss of $890 million for the billionaire businessman who derives the majority of his wealth from his stake in Richemont.
The decline in his net worth was caused by a drop in the market value of his Richemont stake as investors sold off shares in the Swiss Luxury goods holdings as a result of the risk posed by the Omicron-induced outbreak of COVID-19 that swept through China’s largest city, leading to the lockdown of millions of people in leading financial centers and hubs such as Shanghai.
Shares in his luxury goods holdings have dropped from R241.36 ($15.23) per share at the start of the year to R189.22 ($11.94) per share at the time of writing this report, which can be attributed to investors’ reaction to China’s prolonged lockdown.
The extended lockdown in Shenzhen adds to the company’s growing concerns about its sales and earnings, and it may further erode the company’s earning power after it ceased commercial operations in Russia.
Richemont’s Chinese operations generated €2.79 billion ($3.1 billion) in revenue in the first half of its fiscal year 2022, compared to a total of €8.91 billion 9 ($9.81 billion) generated by its operations on four continents.
Analysts predict that the months of April to June will be difficult for the luxury goods firm in terms of sales and earnings if lockdowns in larger luxury hubs such as Shanghai persist in the second quarter of 2022.
