Bloomberg News

Ortega Is Europe’s Richest Man as Spain Ravaged by Debt

June 13, 2012

Just as Spain asked Europe for a bailout topping $125 billion, Amancio Ortega, the septuagenarian Spaniard who founded retailer Inditex SA (ITX), became the region’s richest man.

The tycoon’s fortune rose $3.8 billion to $39.5 billion on June 13, according to the Bloomberg Billionaires Index. That places the owner of the Zara clothing chain above Sweden’s Ingvar Kamprad, who has an estimated net worth of $37.2 billion, and France’s Bernard Arnault, who finished the day at $22.7 billion.

Ortega’s wealth has surged even as Spain reels from a financial crisis that has sent borrowing costs spiraling while joblessness hovers above 20 percent. By reducing its dependence on its home turf and adding stores in emerging markets, Inditex managed a 30 percent gain in first-quarter profit, sending shares up 12 percent yesterday.

“The truth is it doesn’t matter if he’s Spanish or not,” said Christodoulos Chaviaras, a retail analyst at Barclays Plc in London. The company “goes beyond Spanish borders anyway, so it actually benefits massively from the strength of the Chinese consumer. They look like they’re immune to any crisis.”

Emerging Markets

Net income at Inditex, the world’s largest clothing retailer, rose to 432 million euros ($543 million) in the three months through April, the Arteixo, Spain-based company said yesterday. The company posted sales of 3.42 billion euros at stores that include Zara, Pull & Bear and Massimo Dutti. Both results surpassed average estimates among analysts polled by Bloomberg.

About 22 percent of Inditex’s sales will come from Spain this year, compared with 45 percent from emerging markets, according to Anne Critchlow, an analyst at Societe Generale SA in London. The company still has most of its stores -- more than 4,300 -- in Europe, with almost 900 in Asia and about 400 in the Americas. Inditex said it plans to start online sales in China in September.

Spain is the latest euro member to seek a bailout since the start of the region’s debt crisis more than two years ago, with a request last weekend to borrow 100 billion euros from European Union rescue funds to recapitalize its banking system.

Ortega, 76, became the fourth-richest individual on Earth after adding $4.6 billion to his fortune so far this year. The only people richer are Mexican telecommunications tycoon Carlos Slim, Microsoft Corp. (MSFT:US) co-founder Bill Gates and Berkshire Hathaway Inc. (A:US) chairman Warren Buffett.

Since Inditex’s public offering in 2001, Ortega has earned 2.3 billion euros in dividends. He invested much of that into commercial property, taking advantage of the decline in real estate prices that began in 2007.

Kamprad, Arnault

Next among the world’s wealthiest is Kamprad, the 86-year- old founder of furniture retailer IKEA. He maintains control over the closely held business through a network of holding companies and legal entities established more than 30 years ago. His fortune has risen by $74 million since the end of 2011.

Arnault’s net worth estimate was lowered by $14.6 billion on May 17 because of the way he owns his stake in LVMH Moet Hennessy Louis Vuitton SA (MC), the world’s largest maker of luxury goods. While his 70.4 percent holding in Christian Dior SA (CDI) gives him all the publicly traded company’s voting power in LVMH, his economic interest is lower than the figure in LVMH’s annual report. Arnault, 63, is the 14th richest person in the world.

The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York and listed in U.S. dollars.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net


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