Amancio Ortega, the Spanish billionaire behind the global fast-fashion empire Zara, experienced a staggering $9 billion drop in his net worth on Wednesday according to Forbes’s real-time billionaire index, marking one of the most significant single-day losses in recent memory.
Ortega’s wealth, which now stands at $118.5 billion, dropped by 7.42% following disappointing quarterly results from Inditex, the parent company of Zara and several other fashion brands.
Ortega, ranked as the 11th wealthiest person globally, is a pioneer in the fast-fashion industry. He cofounded Inditex in 1975 with his late ex-wife, Rosalia Mera.
The group owns eight brands, including Massimo Dutti and Pull & Bear, and operates 5,000 stores across the globe. Ortega holds a 60% stake in the Madrid-listed Inditex and earns over $400 million annually in dividends, which he primarily reinvests in real estate across Europe and North America.
Inditex’s sales and profit miss expectations
The sharp drop in Ortega’s wealth came after Inditex shares fell by 5% in the wake of weaker-than-expected third-quarter results.
- Sales of €9.36 billion ($9.84 billion) missed analysts’ expectations of €9.51 billion, while nine-month net profit rose 8.5% to €4.44 billion, below the forecasted €4.52 billion.
- Inditex cited currency fluctuations and severe flooding in Spain—its largest market—as contributors to the weaker performance.
- While the floods in October had a “very limited” impact, the company faced challenges due to the strong dollar and weak euro. Most of Inditex’s sales are in euros, which heightened the effect of unfavorable exchange rates.
- Despite the setback, the company has been actively investing in larger stores, logistics centers, and marketing campaigns, including a collaboration with supermodel Kate Moss, to maintain its competitive edge over rivals like H&M and Shein.
What to know
Inditex reported a 9% increase in currency-adjusted revenues for the six weeks leading up to December 9, driven by robust Black Friday sales. However, this growth rate is slower than the 14% reported for the same period in 2023.
- Inditex’s shares, which are trading at 26 times expected earnings for the next 12 months, reflect market confidence in the company’s resilience and future prospects.
- This valuation significantly exceeds H&M’s price-to-earnings ratio of 19.3 times. Despite the recent dip, Inditex’s stock remains up 32% for the year, showing investor faith in Ortega’s fast-fashion empire.
- Amancio Ortega’s legacy extends beyond fashion. After 15 years at Inditex, his daughter, Marta Ortega Pérez, assumed the role of chairperson in 2022, signalling a new chapter for the company.
- As the Zara owner navigates current challenges, its investments in innovation and global expansion are expected to sustain its position as a leader in the fast-fashion industry.
While Ortega’s $9 billion loss highlights the volatility of wealth tied to global markets, his vast fortune and Inditex’s strategic initiatives ensure that his position among the world’s wealthiest individuals remains unshaken.