French luxury on its knees: Great fortunes hit hard

In a global economic context marked by successive upheavals, few sectors manage to maintain lasting stability. Long perceived as an unsinkable fortress, luxury, the symbol par excellence of prosperity and exclusivity, has also faltered in 2024. Indeed, the fortunes of emblematic figures such as Bernard Arnault, Françoise Bettencourt Meyers and François Pinault have suffered losses. colossal, to the tune of more than 70 billion dollars cumulatively. Such a decline has its origins in a set of interrelated factors: a slowing Chinese economy, domestic political tensions and increased stock market volatility. These combined elements have shaken the pillars of the sector, revealing an unexpected fragility.

Failing fortunes: a dark year for French luxury

In 2024, the great French luxury fortunes have gone through a particularly difficult period, marked by a drastic fall in their net worth. Bernard Arnault, once the third richest man in the world, saw his fortune decrease by 15%, a loss directly linked to the 14% drop in the price of LVMH, of which he is the majority shareholder. “LVMH’s stock market performance directly reflects the challenges of the global luxury market,” noted the Bloomberg Billionaires Index.

For her part, Françoise Bettencourt Meyers, heiress to the L'Oréal empire, suffered an even more pronounced setback. His fortune fell by 25%, in parallel with a 24% devaluation of his group's shares on the Paris Stock Exchange. The Wertheimer brothers, owners of Chanel, also recorded a loss estimated at several billion euros, although the impact was mitigated by the luxury house's lack of stock market listing.

The case of François Pinault, founder of the Kering group, stands out for its magnitude. His personal fortune fell by almost 40%, the result of a spectacular 41% fall in the price of Gucci, the group's main engine of growth. These losses reveal a clear break with previous years, where luxury appeared to be an undeniable safe haven for investors. Such a trend, combined with the sluggish performance of the big names in the sector, highlights a major change for the French luxury industry.

The role of China and the shadow of political tensions

China, a historic pillar of growth for the luxury sector, has taken a central place in the 2024 crisis. With Chinese consumers generating nearly 30% of the industry's revenue, the weakness of the country's economy had considerable repercussions. Contrary to expectations, the recovery of the Chinese market did not materialize. The economic measures put in place by Beijing, intended to stimulate consumption and revive the economy, have proven ineffective. This stagnation has aggravated the difficulties of luxury players, whose sales figures in this key market have declined significantly. At the same time, increased trade tensions between China and the United States have amplified the climate of uncertainty, which is slowing exports and further complicating the situation for companies in the sector.

In France, political turbulence has exacerbated this economic crisis. The dissolution of the National Assembly in June introduced a prolonged climate of instability. This situation has paralyzed key government initiatives, such as the 2025 finance bill, which included a controversial increase in corporate tax. Such a measure, according to Jean-Jacques Guiony, financial director of LVMH, would have cost his group “more than 700 million euros”, which would accentuate the fears of large companies. Since this event, the CAC 40, which reached historic highs before June, has no longer returned to its high levels. Investors, faced with increasing fiscal and economic turbulence, are becoming increasingly pessimistic, which is fueling a vicious circle of devaluation on the markets.

This dark year calls into question the future of luxury. While Asian markets remain strategic, they appear increasingly unpredictable. Players in the sector will have to diversify their approaches, strengthen their presence in other regions and rethink their strategies in the face of a tense national political context. In 2025, the challenge will be to regain investor confidence and redefine their resilience in the face of volatile external factors. Thus, the year 2024 will go down in history as a brutal reminder: even luxury giants must adapt to a world where stability can never be achieved.