Francois Pinault (88), the founder of Kering Group, which owns world-renowned luxury brands like Gucci, Balenciaga, and Saint Laurent, is experiencing a rapid shrinkage in his lifetime wealth.
This month, Chairman Pinault's net worth fell to around $22 billion, one-third of its peak of approximately $64 billion (about 92 trillion won) in 2021.
On the 25th (local time), Bloomberg reported that Chairman Pinault has fallen out of the top 100 in its self-reported Billionaires Index. This is the first time Chairman Pinault has not ranked in the top 100 since Bloomberg began the tally in 2008. Chairman Pinault's assets have plummeted by more than 60 trillion won in just four years, and, within just over four months this year, his assets have decreased by 29% compared to the end of last year.
The biggest reason is the group's key brand, Gucci. Gucci has suffered severe setbacks this year, following last year's decline. The revenue of Gucci for the first quarter of this year, disclosed on the 25th, dropped by 25% compared to the same period last year, worse than the negative market expectation of a 22% decrease.
The analysis indicates that the loss of talent has been a crucial reason for Gucci becoming a burden on Kering Group. Since creative director Alessandro Michele, who led the Gucci brand to its peak until 2022, left for Valentino, Gucci has struggled to redefine its brand concept and has been facing poor performance since 2023.
Bloomberg reported that "Gucci has pulled down Kering Group's total revenue by 14% this year." Global investment banks subsequently lowered their operating profit forecasts for Kering Group by 10% to 15% after the first quarter performance announcement. Following the disappointing results, on the 25th, Kering Group's stock price fell by 5% during trading on Euronext Paris.
The market capitalization of Kering Group has already dropped by more than 45% over the past year, nearly halving its value. The market capitalization has sunk to a quarter of what it was in April 2022, when Gucci's popularity was at its peak.
Luca Solca, an analyst at Bernstein, noted in an interview with Reuters, "For Gucci to record profits again, it will need much more time and investment than expected."
While Kering Group, led by Pinault, is struggling, the polarization phenomenon within the luxury industry has become more pronounced. During the same period when Gucci recorded double-digit revenue declines, competitor Hermès saw its revenue increase by 12%. The stock price of Hermès, listed on Euronext Paris, has reached an all-time high earlier this year.
LVMH (Moët Hennessy Louis Vuitton), which owns Louis Vuitton, has faced challenges this year but performed relatively well compared to Kering Group. LVMH's stock price has fallen only by 18% since January.
Analysts from Jefferies and other investment banks predict that "the effects of the brand's refresher by Gucci's new creative director, Sabato de Sarno, will likely only be seen in the second half of next year", adding that there is a high possibility of further double-digit sales declines for Gucci in the upcoming second quarter.
As the situation worsened, the Pinault family holding company Artemis decided to sell its equity in key commercial district real estate in Paris. The Pinault family announced that it would sell 60% of its Paris real estate to private equity firm Ardian for €840 million (about 1.2 trillion won), illustrating the financial pressures facing the Pinault family.
Some have raised concerns that the significant decline in Chairman Pinault's assets could negatively impact art collection activities or the overall auction market.
Chairman Francois Pinault is well known as a world-renowned art collector. The Pinault family currently possesses an extensive art collection of about 10,000 pieces, valued at $3 billion (about 4 trillion won). At the same time, they operate famous art museums such as the 'Bourse de Commerce' in Paris and 'Palazzo Grassi' in Venice, Italy.
Art news outlet Artnet News, quoting experts, stated that "the Pinault family still has sufficient financial capacity for museum operations and the maintenance of the existing collection," yet the pace of new acquisitions from certain modern artists may slow compared to before.
However, Chairman Pinault himself recently clarified that "art is a long-term investment that is not affected by market fluctuations" and that there are no plans to sell his collection or museums.
Experts have concluded that ultimately, the recovery of Chairman Francois Pinault's assets depends on the revival of Gucci. Bloomberg Intelligence, a research institution under Bloomberg, forecasted that "if Gucci successfully rebounds with the new creative director's first collection to be unveiled at the end of 2025, Chairman Pinault's net worth could recover to around $25 billion within a year."
However, there are also warnings that prolonged underperformance by Gucci could lead Kering Group and the Pinault family into a serious long-term recession.
On the 23rd, Lux Clayman, a luxury goods industry expert at investment bank HSBC, predicted in a report that "the resurgence of Gucci cannot be achieved simply by changing designers" and that at least 18 months will be needed to revamp the overall brand strategy, marketing, and distribution channels.