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28 November 2024

L'Oréal Heiress Francoise Bettencourt Faces Wealth Crisis

Beauty giant's shares slump amid weakened demand as Bettencourt Meyers loses billions

Francoise Bettencourt Meyers, the heiress of the L’Oréal fortune and once celebrated as the world’s richest woman as of 2023, has encountered significant financial turbulence this year. After finishing the prior year with her fortune reaching $100 billion, the 71-year-old vice chair of L’Oréal has seen her wealth plummet by $26 billion since the start of 2024. This dramatic drop brings her current net worth down to approximately $74 billion, according to the Bloomberg Billionaires Index.

The decline isn't just her misfortune alone; it resonates within the broader market as well. The shares of L’Oréal have dropped about 25% this year, significantly impacted by faltering consumer demand, particularly from China—a key market for the beauty and luxury sectors. This sluggishness reflects the broader struggles within the luxury and beauty industries as they contend with stagnant recovery from pandemic-related disruptions.

Bettencourt Meyers is not merely sitting idle during this financial upheaval. She remains actively engaged with her family’s investment firm, Téthys Invest, which she chairs. This firm is not only known for being the largest shareholder of L'Oréal but also for its diverse investments across various sectors, including pet care, education, and fashion. Recent reports indicate her family has ramped up its investment activities, increasing the number of deals by 26% this year. Their portfolio boasts stakes in intriguing companies, such as the niche French software developer Septeo SAS and the education provider Galileo Global Education.

Despite the sharp declines, the Bettencourt Meyers family continues to showcase their dedication to nurturing French entrepreneurship. With roots dating back to 1909, when L’Oréal was established to produce hair dye for local salons, the brand has transformed and expanded tremendously. It now encompasses major brands like Maybelline and Garnier, with the whole enterprise valued at nearly €180 billion. Bettencourt Meyers inherited this business empire from her mother, Liliane Bettencourt, after her passing in 2017.

Francoise's financial losses have seen her slip from the title of the world’s wealthiest woman, originally secured after reaching her milestone fortune last year, which was historic as she was the first female billionaire to ever hit the $100 billion mark. Fast forward to August 2024, and she was overtaken by Alice Walton, the daughter of the Walmart founder Sam Walton. Bettencourt Meyers continues to trail Bernard Arnault, the CEO of luxury giant LVMH, whose wealth has also faced significant erosion, reportedly dropping by about $40 billion this year.

Industry experts highlight the broader headwinds affecting the luxury and cosmetics sectors. The shift in consumer behavior and reluctance to spend during the pandemic recovery phase have left many companies, including L’Oréal, grappling with the consequences. The company has adjusted its outlook, reflecting not just its specific challenges but those of the market at large.

Despite the financial strain, the heirs of the L’Oréal legacy show no signs of retreat. The focus appears to be on resilience and continued investment within their beloved France. For Bettencourt Meyers, the wave of investments through Téthys is part of her plan to sustain growth and influence, even as her individual wealth diminishes.

Looking forward, all eyes are on how Bettencourt Meyers will navigate these turbulent waters and whether her investments can bear fruit once again, restoring both her personal wealth and L’Oréal to its previous heights. While her current position may seem precarious, her sustained activities signal hope and determination within the swirling tides of economic uncertainty.

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