There are a million ways to get rich these days. You can own property, manage money, go mining or trade commodities. You can turn ash into concrete, run hotels or create brilliant new software.
But you still can’t beat the oldest sources of wealth – feeding and clothing the masses.
That’s one of the messages from Forbes magazine’s latest billionaire list, which includes 128 newly-minted 10-figure moguls – and a surprising number of billionaires from the fashion and food sectors.
In some ways, the arrival of a new band of fashion billionaires was unexpected. Consumer confidence around the Western world has been patchy and retailers have been doing it particularly tough.
But there’s a link between these fashion moguls: Asia.
Let’s meet 10 of the most interesting entrepreneurs, starting with the rag traders.
You’ve probably never heard of Patrizio Bertelli, but I bet you’ve heard of his wife – Miuccia Prada, founder of the iconic luxury brand Prada. Miuccia is the design genius behind the company, while Bertelli is the business brains of the operation. It was he who led the company though a float in June 2011, where Prada raised almost $3 billion. But the float wasn’t on the New York Stock Exchange nor in Milan or London – it was the Hong Kong Stock Exchange, chosen for its proximity to the booming Chinese luxury sector.
Business partners Lawrence Stroll (of Canada) and Silas Chou (of Hong Kong) took Hong Kong-based fashion house Michael Kors public in November, listing on the New York Stock Exchange in a highly successful float – shares are up 143% since making their debut. While designer Michael Kors remains the public face of the company, it is his backers Stroll and Chou who have helped develop the brand into a global success story. Chou’s father, also a rag trader, was a former member of the Forbes list.
Professional athletes and weekend warriors all over the world would be familiar with the Under Armour brand of sports undies, but they may not know the name Kevin Plank, who founded the business in 1996 at the age of 23. The basis of the company is its synthetic, sweat-wicking t-shirts that are designed to stay dry and cool where a cotton shirt becomes a wet, heavy lump. Plank listed the company in March 2009 at about $US12 a share and has watched the stock price soar above $US80 as revenue climbed to $US1.5 billion.
Sara Blakely adorns the cover of Forbes and fair enough too – as the youngest self-made woman on the list (that is, no inheritance) she deserves all the credit she gets. Blakely is the founder of women’s underwear group Spanx, famous for its female curve flattering shapewear.
She tipped her savings of $5,000 into the product back in 1998 and spent two years researching the market before launching in 2000. She claims to have never spent a cent on marketing, but you don’t need to do much advertising when Oprah Winfrey says she’s a big fan of your product. Today the company turns over $250 million; Blakely owns 100%.
The best part of her cover story was her great take on being rich. “I feel like money makes you more of who you already are,” she told Forbes. “If you’re an asshole, you become a bigger asshole. If you’re nice, you become nicer. Money is fun to make, fun to spend and fun to give away.”
How many entrepreneurs around the world have become rich by owning a slice of the McDonald’s empire? Plenty, but Colombian-born Woods Staton has done particularly well. In 2007, Staton’s company Arcos Dorados (which means “Golden Arches” in Spanish) paid $US700 million for the rights to operate McDonald’s in Latin America and the Caribbean. Just five years on he owns stores in 20 countries and his group is listed on the New York Stock Exchange. It’s market cap is now $US4 billion, which makes that original $US700 million investment look like a very wise move.
While many entrepreneurs join the Forbes billionaire list courtesy of a sharemarket listing, Tilman Fertitta went the other way – he took hospitality group Landry’s private in October 2010, orchestrating a $US1.4 billion buyout as a majority shareholder. Today the company owns restaurant chains including Bubba Gump Shrimp Company, Saltgrass Steak House and Landry’s Seafood as well as a number of casinos. What’s interesting about Fertitta is the way he rose to the top of the company. After joining as a real estate adviser in 1986, he climbed to CEO just two years later and eventually took a majority shareholding. Not quite a shop-floor-to-boardroom ascension, but an impressive rise nonetheless.
Is this the most colourful character on the Forbes list? Indian-born, US based entrepreneur Manoj Bhargava has been a monk, worked in the demolition game, helped run his father’s plastics company and owned a chemicals company. But the product that propelled him onto the rich list was an energy drink called 5-Hour Energy. The small shot of caffeine-infused drink is a favourite of truck drivers, students and Wall Street traders and now generates sales of $US1 billion a year. How does a former monk reconcile selling energy drinks? “5-Hour Energy is not an energy drink, it’s a focus drink,” he says.
EF Education First one of the world’s biggest providers of language education and what it calls “cultural education”, where students get to experience other cultures by studying abroad and living with host families. Bertil Hult, who is dyslexic, dropped out of college and started the business in Sweden in 1965, expanding to the point where it operates 400 schools in over 50 countries – including Australia. The company has also won a string of huge contracts, including providing language education for staff at the 2008 Summer Olympic and the 2014 Winter Olympics.
One of the richest new billionaires on the Forbes list is Laurene Powell Jobs, widow of Apple founder Steve Jobs. Despite controlling large stakes in Apple and Disney, Powell does not appear as though she will have much say in either company; she does not sit on either companies’ board and her shares are held through trusts. Powell is active in several charities.
The lone new Australian billionaire on the list is Ivan Glasenberg, the chief executive of commodities giant Glencore who soared to the public’s attention after the float of the company in May 2011. The South African-born, Swiss-based executive became an Australian citizen during a short stint working in Melbourne. If the merger between Glencore and Xstrata is successful Glasenberg will become deputy CEO of the new entity.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
