Has The Luxury Performance Crisis Been Lifted?

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LVMH group's fashion

Revenues and profits declined in the first half of the year, but the revenue grew by 5% in the third quarter.

Has the performance crisis been lifted? Some analysts say that according to the first half year running data of the global luxury goods industry based on the Pambianco Strategiedi Impresa of Milan consulting company, the industry has begun to show signs of recovery, but it still belongs to the bottom stage.

The research data report indicates that the global luxury fashion group's revenue in the first half of the year has increased by 2.8%. This research report has investigated the operation of 13 luxury fashion groups in Italy, 10 groups in Europe except Italy, and 12 groups in the United States.

However, due to the different statistical periods of each luxury group, including Damiani, Piquadro, Burberry, Richemont, Mulberry, Nike, Coach, Ralph Lauren and Michael Kors did not take part in the statistical research.

Dior recorded a 7% year-on-year growth of 502 million euros in the first quarter of September 30th as a result of a fall in operating income for the two consecutive quarter, excluding the impact of the exchange rate and a 8% increase in profits. The brand name is a new positive trend.

The picture shows Dior shops in Beijing.

Among the luxury fashion brands belonging to Italy, including Luxottica, Prada and Salvatore Ferragamo, Safilo, Tod 's, Moncler (the French brand is listed in Milan, Italy), Brunello Cucinelli and Moschino parent group, the total revenue is $11 billion 610 million, down 1.6% from the first half of last year.

Among them, the strongest growth in revenue was Moncler, or 17.1%, followed by Brunello Cucinelli, a gain of 9.8%, and a third increase of Aeffe or 7.1%.

In addition to Italy, the luxury fashion brands belonging to Europe include LVMH group, Zara parent company Inditex, H&M group, Adidas, Kai Yun group, HugoBoss and JimmyChoo, and the total revenue is 68 billion 140 million USD, up 5.8% over the same period last year.

The fastest growing was Pandora, a Danish jewellery retailer. 26.9% was second, Adidas was 15%, and Inditex was 11.1%.

It is noteworthy that Gucci, the most important luxury brand of Kai Yun group, is fully recovering.

In contrast to the 3.1% growth in first quarter sales, the brand showed an accelerating trend in the second quarter, with a 7.4% strong growth in sales.

In the first half of this year, Gucci business revenue recorded 1 billion 948 million euros, an increase of 3.9% over the same period, an increase of 5.4% in organic income, and an increase of 7% to 536 million 900 thousand euros in operating profit over the same period, which outperformed most luxury brands.

In the luxury fashion group of this study, the profit before tax and depreciation and amortization EBITDA was 18.3% lower than that of 19.9% in the same period last year, 1.6%.

Among the Italy group, the highest growth rate of EBITDA was SalvatoreFerragamo, 23.4%, Moncler 22.6% and Luxottica 22%.

Excluding Herm, s did not disclose EBITDA. The total EBITDA of luxury fashion brands other than Italy dropped by 1.2% from 19.4% in the same period last year. The fastest growth of EBITDA was Pandora, 37.2%, LVMH 21.9% and Inditex 20.2% of Zara parent company.

Among the luxury fashion brands belonging to the US, including Gap, VFCorp., LBrands and Guess, CK parent PVH, G-IIIApparelCorp. and KateSpade, the total revenue was $32 billion 20 million, down 1.6% from the first half of last year, and accounted for 12.6% of total EBITDA.

In the US group, EBITDA was the tallest jewelry retailer Tiffany Tiffany&Co., 22.7%, while LBrands recorded 17.3%, 1.2% lower than the same period last year; PVH performed well, up 3.1% to 15.3% over the same period last year.

In May this year, according to Bain research consultancy and Italy luxury industry association Altagamma, the luxury market will grow by no more than 2% this year.

Cosmetics, leather goods, footwear and accessories will be the best selling category this year, but rigid luxury goods such as jewellery and watches will not increase.

Bain predicts that in the next few years, the luxury market is expected to expand at a rate of 2% to 3% per year, mainly in the Chinese market. The key is that it can guide the industry to restart. Analysts believe that China is still the largest contributor to the global growth of the luxury goods industry, with a turnover of more than 50%.

Bain company partners Claudia D Arpizio pointed out earlier that the current luxury market will stay in a slow but growing period, and the mainland market will become the key to the recovery of the luxury goods industry.

According to the Boston consulting group analysis, thanks to the digital marketing strategy, the performance of the luxury industry is getting warmer in the first half of this year, which means that the digitalization of luxury brands is an inevitable trend.

In October 6th, the French American Chamber of Commerce held a seamless luxury experience: retail and digital strategy conference. Most people in the industry believe that the whole channel retail marketing strategy is the key to the future development of luxury goods.

RobbinMitchell, partner and managing director of Boston group, said that consumption of 25% to 35% of American consumers in the next few years will be borne through Internet channels.

He stressed that this is a period of pition between luxury and luxury consumer relations. "Luxury consumers tell us that they want to redefine this new relationship."

Thanks to the recovery of performance, since June 1st this year, the stock price of Gucci parent group has increased by 30%, while LVMH and Hermes group have increased by about 15%.