The luxury goods market is sluggish, and the market is pinning its hopes on emerging fashion brands.
According to an earlier report by Fashion Business Daily, the French fashion brand Sézane has become the darling of investment institutions in the past two years. Jack Ma may, through the Blue Pool Holdings company jointly held by him and Joseph Tsai, purchase a 10% stake in Sézane from the New York private equity fund General Atlantic. The news has attracted widespread attention in the market.
Sézane, as a dark horse among European startups, received support from Téthys Invest, the investment company controlled by the Bettencourt Meyers family, the major shareholder of L’Oréal Group, in 2022. After the completion of this transaction, Sézane’s founder, Morgane Sézalory, still retains the controlling stake, while General Atlantic, Téthys Invest, etc. continue to hold minority stakes.
In September this year, the American designer brand The Row also received external financial support.
The Wertheimer family, the owners of Chanel, and Francoise Bettencourt Meyers, the heiress of L’Oréal, have respectively acquired minority stakes in The Row through their family offices, Mousse Partners and Téthys Invest. Additionally, Imaginary Ventures, co-founded by Natalie Massenet, the founder of Net-a-Porter, has also invested in the brand.
The minimalist brand known for its pursuit of independence has once again accepted an investment after a decade, immediately triggering widespread discussions in the market. According to sources, the founders of The Row, sisters Mary-Kate Olsen and Ashley Olsen, remain the largest shareholders of the brand, and the valuation of this transaction is as high as $1 billion. The market estimates that The Row’s current annual sales are between $250 million and $300 million, with an operating profit of over $60 million, and an annual growth rate of between 20% and 30%.
It is not difficult to find that the same person, Francoise Bettencourt Meyers, appears in two fashion brand acquisition cases. This 71-year-old low-key wealthy woman is becoming the invisible hand driving the development of the fashion industry.
Both Sézane and The Row have received support from the investment company of L’Oréal heiress Françoise Bettencourt Meyers’ family
On December 28, 2023, the Bloomberg Billionaires Index shows that Françoise Bettencourt Meyers, the heiress of L’Oréal, has become the world’s first female billionaire with a net worth exceeding $100 billion. Her total wealth amounts to $100.2 billion, ranking 12th on the global rich list.
Her increase in worth is mainly related to the 2023 performance and share price increase of L’Oréal Group.
The share price of L’Oréal Group exceeded 450 euros in the last few days of last year. The group’s annual performance was also the best since 1998, and she has been a director of the group since 1997. In 2023, L’Oréal’s sales increased by 7.6% year-on-year to 41.18 billion euros, with a comparable growth of 11% excluding the impact of exchange rates and other factors. This is the first time that L’Oréal’s sales have exceeded the 40 billion euro mark.
Benefiting from L’Oréal’s diverse brand portfolio, the group successfully withstood the pressure on high-end beauty products caused by inflation in the European and American markets and the slowdown in the Chinese market, thanks to the strong growth of its Consumer Products Division and the Dermatological Beauty Division. It showed greater resilience compared to Estée Lauder, which focuses on high-end beauty products, and therefore once gained favor from the capital market.
The share price of L’Oréal Group exceeded 450 euros in the last few days of 2023, and its annual sales exceeded 40 billion euros for the first time
However, entering 2024, Françoise Bettencourt Meyers’ net worth decreased by 26 billion US dollars to 73.7 billion US dollars, becoming one of the richest people with the most significant loss in worth.
Only the 75-year-old LVMH founder Bernard Arnault has suffered greater losses than her. His net worth has decreased by nearly $40 billion to $174.5 billion, making him the person with the largest losses among the world’s top 500 billionaires, mainly affected by the slowdown in the growth of the luxury goods market.
Since the beginning of this year, L’Oréal has been affected by the low consumer confidence in China. Its revenue increased by 6% to 32.4 billion euros in the first three quarters, and by 8.1% at constant exchange rates. Its revenue in the third quarter increased by 3.4% to 10.3 billion euros, which is lower than the expected 6%. The performance has slowed down significantly. The group said that the beauty market in mainland China has been poor since the second quarter and has continued to deteriorate, disappointing the market.
Since the beginning of the year, L’Oréal’s share price has cumulatively dropped by 25% to 332 euros, with a market capitalization of approximately 178.8 billion euros.
Nevertheless, Françoise Bettencourt Meyers remains the beneficiary of L’Oréal’s great strides in development over the past nearly 20 years.
Her grandfather, pharmacist Eugène Schueller, created a hair dye called Auréale in the kitchen of his Paris apartment in 1907. His company was renamed L’Oréal in 1939 and later acquired brands such as Lancôme, Maybelline, and Helena Rubinstein, becoming the beauty giant L’Oréal Group.
Eugène Schueller died in 1957, and his only daughter, Liliane Bettencourt, inherited the property. Liliane Bettencourt’s husband, André Bettencourt, was a politician who served as the French Minister of Industry and Foreign Affairs, and the mayor of Saint-Maurice-d’Ételan. He had a close relationship with former President François Mitterrand. After Mitterrand became the President of France, he considered appointing André Bettencourt as the Prime Minister of France in 1986.
Liliane and André Bettencourt, as members of the L’Oréal board of directors, witnessed the entire process of this company growing into a global cosmetics giant.
André Bettencourt resigned as Vice Chairman of L’Oréal in the mid-1990s and transferred his shares to his wife, Liliane Bettencourt. He died in November 2007.
In 2017, Liliane Bettencourt also passed away at the age of 94. Françoise Bettencourt Meyers, as the only daughter, inherited the L’Oréal shares held by her mother and became the largest individual shareholder of L’Oréal, holding nearly 35% of the shares of this beauty giant.
According to media reports, when Liliane Bettencourt died, her net worth was approximately $44.3 billion, making her the richest woman in the world at that time. However, Françoise Bettencourt Meyers’ assets are now more than twice what she inherited, which is evidence of L’Oréal’s continued growth and expansion over the past seven years.
The mother-daughter relationship between Liliane Bettencourt and Françoise Bettencourt Meyers is not harmonious
Currently, Françoise Bettencourt Meyers serves as the Vice Chairperson of the Board of Directors of L’Oréal Group and the Chairperson of the family office Tethys. Her husband, Jean-Pierre Meyers, is the CEO of the French spirits producer Tethys SAS and a member of the Board of Directors of Nestlé.
As the only daughter of the family, Françoise Bettencourt Meyers has a completely different style from her mother, who was also once the sole heir. Liliane Bettencourt frequently attended social events of the powerful and influential. She loved haute couture and jewelry, while Françoise Bettencourt Meyers pays more attention to personal privacy and is passionate about writing and playing the piano. She is an intellectual. She has written two books, one on Bible studies and the other on the genealogy of the Greek gods.
However, as the richest family in France, the family disputes of Françoise Bettencourt Meyers are destined to be closely intertwined with the French business and political circles. In 2007, the Bettencourt affair attracted the attention of the entire France. At that time, Françoise Bettencourt Meyers filed a lawsuit, accusing her mother of being manipulated by François-Marie Banier, a socialite photographer 25 years younger than her, to defraud her of money, artworks, and even an island in the Seychelles.
During the 8-year investigation period, this case involved many dark sides of the French political arena, including privileges and bribery, and also involved former President Sarkozy, making this case once known as the French version of the Watergate scandal.
In October 2011, a hospital assessment proved that Liliane Bettencourt suffered from dementia and Alzheimer’s disease. The judge entrusted her guardianship to Françoise Bettencourt Meyers, and her assets, including more than 30% of the voting rights in L’Oréal, were placed in a trust fund controlled by her daughter. In 2012, Liliane Bettencourt gave up her seat on the L’Oréal board, and her grandson Jean-Victor Meyers was appointed as a board member.
Liliane Bettencourt said straightforwardly in two television interviews, “My daughter could have patiently waited for me to die instead of doing everything she can to urge me to die.”
In May 2015, the court found photographer François-Marie Banier guilty of abuse of power, sentenced him to two and a half years in prison, and ordered him to pay 158 million euros in damages. The other seven defendants were convicted along with him.
In November 2023, Netflix launched a documentary titled “Billionaires, Butlers, and Boyfriends”, which provides a detailed account of the Bettencourt affair.
Apart from being an inheritance battle and family drama of a wealthy family, Françoise Bettencourt Meyers’ life is actually rather simple. Aside from her personal hobbies, she mainly devotes her energy to the fields of charity and investment. As the head of the Bettencourt Schueller Foundation, she is committed to supporting scientific research and artistic activities, while at the same time pushing L’Oréal’s board to move the company in the direction of sustainable development and digital innovation.
In addition, her main focus is on Téthys Invest, the investment institution controlled by her as the chairman of the family office.
Although the public previously knew that she possessed a huge amount of wealth, little was known about how she specifically used this vast fortune. However, as Téthys Invest speeds up its actions, the market gets a glimpse of its investment strategy.
Téthys Invest has recently acquired approximately 13% of the shares of a software provider, Septeo SAS. Septeo SAS provides software applications for lawyers and human resources departments and is valued at over 3 billion euros. The Singapore sovereign wealth fund GIC also holds a similar share, while the private equity firm Hg retains the majority of the shares.
Since its establishment in 2016, Téthys Invest has positioned itself to provide long-term support for entrepreneurial projects. It currently holds shares in at least 10 companies, including fashion brands Sézane and The Row, covering a wide range of fields such as healthcare, education, fashion, and insurance.
In 2023, Téthys Invest acquired the French insurance company April Sante Prevoyance, becoming one of the minority shareholders after the private equity fund KKR acquired its majority stake. The company also supports the French animal vaccine and drug manufacturer Ceva Santé Animale and increased its investment in the educational institution Galileo Global Education in 2020.
Up to now, except for The Row, all the companies invested by Téthys Invest are local companies founded by French entrepreneurs.
It is worth noting that in addition to Françoise Bettencourt Meyers, her husband Jean-Pierre Meyers, and her two sons Jean-Victor and Nicolas all work for this investment company. Although this investment company obtains some funds from the dividends of L’Oréal Group, the entire family is involved in investment, and is increasingly disconnected from the daily operations of L’Oréal Group. This also reflects the overall trend of global fashion and beauty giants to become less family-oriented.
Françoise Bettencourt Meyers, along with her husband and two sons, provides support for the investment company Téthys Invest
Estée Lauder Group, the biggest competitor of L’Oréal Group, completed the process of de-familization this year.
Jane Lauder, the granddaughter of the founder of Estée Lauder and the group’s Chief Digital Officer, has announced that she will be leaving her position at the end of this year. She has held this position and also served as Executive Vice President of Marketing since 2020. Jane Lauder will retain her seat on the board, but her departure means that members of the Estée Lauder family will no longer hold any positions in the daily operations of the group.
Although the Wertheimer family, the owner of Chanel, still firmly controls this independent and unlisted luxury giant, David Wertheimer, a member of the fourth generation of the family, is also exploring new territory through investment.
British luxury retail platform Cult Mia recently raised $2 million in a seed funding round, and David Wertheimer is among its investors.
David Wertheimer established the private equity investment firm 1696 Partners, raising over 110 million US dollars to invest in startups in the fashion, jewelry, beauty, and lifestyle sectors. 1696 Partners is headquartered in Luxembourg and has currently set up investment teams in Europe and Asia. The company’s goal is to enter new market segments.
It is learned that the company’s first three investments were made in a European skiwear brand, a luxury watch operator, and a brand retail management consulting company, but the detailed information of the companies was not disclosed.
When the backstage of the founding family gradually loses control over the giants, they need to use their huge wealth to establish new businesses and continue to search for new opportunities in the next century. After all, the continuous scaling and systematization of top brands is an irresistible trend, and new opportunities are hidden in the unremarkable niche areas.
In contrast, Bernard Arnault of luxury giant LVMH has placed his five children in the front-line operational positions of the group. The inheritance battle of the former world’s richest man is attracting global attention.