Dolce and Gabbana become billionaires amid global spending spree
Jan 16 2013 , Bloomberg
Domenico Dolce, 54, and Stefano Gabbana, 50, the co-founders of Dolce & Gabbana, the Milan-based fashion retailer whose Plumeti Tulle and Lace prom dresses sell for about $4,000, have joined the ranks of the world’s richest, according to the Bloomberg Billionaires Index.
Sandro Veronesi, the 53-year-old owner of closely held Calzedonia Group, the retail franchise that sells bras, bikinis and briefs through its Intimissimi and Tezenis brands, has also amassed a 10-figure fortune.
“They are in two completely different market segments,” Carlo Pambianco, founder of Milan-based fashion consultancy Pambianco, said by phone. “Both are among the most valuable unquoted fashion companies in Italy.”
Growing global consuming spending has fueled a bull market for fashion retail companies. Shares of Italy’s Prada more than doubled in 2012. New York-based Michael Kors Holdings shares were up 87.3 per cent during the year, and Germany’s Hugo Boss rose 44.5 per cent.
Fashion billionaires are benefiting from what New York- based consultancy McKinsey & Co. calls the “rise of the consuming class.” According to an October 2012 luxury goods report from Boston-based Bain & Co., global sales of apparel, accessories, cosmetics and fragrances expanded by 10 per cent in 2012 to $275 billion, the third straight year sales grew by at least 10 per cent.
“There’s solid momentum in the sector driven by strong demand out of the newer markets,” said David Wu, a luxury goods analyst at Telsey Advisory Group in New York. “China continues to be a huge growth opportunity and more attention is being paid to Brazil and India especially.”
At least four other fashion billionaires have been created in the past 12 months, according to data compiled by Bloomberg. None have appeared on an international wealth ranking.
Among them Spain’s Sandra Ortega-Mera, the 44-year-old daughter of Amancio Ortega, the founder of the Zara chain and the world’s third-richest man; Tory Burch, 46, the co-founder of New York-based shoe and handbag-maker Tory Burch; and Prada executives Marina Prada and Alberto Prada Bianchi.
Dolce & Gabbana is valued at $5.3 billion, according to data compiled by Bloomberg, applying the ¤1.1 billion ($1.5 billion) revenue in 2011 as reported by the company to the average enterprise value-to-earnings before interest, tax, depreciation and amortisation and price-to-earnings multiples of four publicly traded peers London-based Burberry Group, New York’s Ralph Lauren, Prada and Hugo Boss. Enterprise value is defined as market capitalisation plus total debt minus cash.
Dolce, who is D&G’s chairman, owns a 41.8 per cent stake in the company, filings with the Italian Chamber of Commerce show, giving him a net worth of at least $2.2 billion. Gabbana, who is president, controls a 40 per cent stake valued at $2.1 billion.