Zara founder overtakes Buffett as world's third richest man
Spaniard Amancio Ortega has seen his wealth surge despite his country's economic troubles
THE 76-YEAR-OLD Spanish founder of the Zara fashion chain, Amancio Ortega, has knocked Warren Buffett off third sport in the Bloomberg Billionaires Index. With shares in Zara's parent company Inditex – 60 per cent owned by Ortega - gaining 3.8 per cent on Monday, his fortune rose from $45 billion to $46.6 billion, enough to overtake Buffett's net worth of $45.7 billion.
How has he done it?
Ortega's wealth has risen by 32 per cent this year despite Spain's economic difficulties. As Bloomberg explains, Inditex has reduced its dependeny on its home country – where unemployment hovers above 20 per cent – and increased its presence abroad, especially in emerging markets like China.
Inditex owns a raft of retailers including Massimo Dutti, Zara Home, Kiddy's Class and Pull and Bear as well as Zara. It runs more than 4,300 stores across Europe, but now has almost 900 in Asia and about 400 in the Americas.
"The truth is it doesn't matter if he's Spanish or not," Christodoulos Chaviaras, a retail analyst at Barclays, told Bloomberg in early June, the last time his wealth jumped by a similar amount ($1.5 billion in a day). Inditex "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."
Monday's shares jump came as part of a European stocks rally after the German government backed the European Central Bank's plan to buy bonds from Spain and other debt-racked member countries.
How rich is third richest?
Not that rich by the standards of the world's two wealthiest men, the Mexican telecoms tycoon Carlos 'Slim' Helu and the Microsoft founder Bill Gates. Their fortunes today, according to the Bloomberg Billionaires Index, stand at $74.1bn and $63.3bn respectively.
At least Ortega can take comfort from the fact that he is the richest man in Europe, comfortably ahead of the Ikea founder, Ingvar Kamprad ($37.3bn). Ten billion or so behind them are another Swede, Stefan Persson ($25.6bn), the single largest shareholder in the fashion retailer Hennes & Mauritz, and the French luxury goods billionaires Bernard Arnault and Lilliane Bettencourt on $24.8bn and $24.4bn respectively.
Will it last?
Any one of these men and women can drop several million here and there – on paper. Carlos Slim, for instance, was down $80.5m yesterday, while Gates lost $271m.
According to Walter 'Bucky' Hellwig of BB&T Wealth Management in Birmingham, Alabama, because Ortega has a relatively "concentrated" holding, it implies more risk. "You may have these fits and starts between them going forward."
Is he happy?
We don't really know – he has kept a low profile, never giving interviews, while he has built up his empire from a single shop in La Coruna. When he decided to step down as chairman and CEO of Inditex in January 2011, he simply sent a "Dear friends" memo to his 98,000 employees explaining that it was time for his number two, Pablo Isla, to take over. He is said to live in a discreet apartment in La Coruna. ·