Luxury industry performance index – 11/2019

tbtl

TBTL’s Luxury Industry Performance Index (LIPI) is a monthly published indicator, providing a quick overview of the high-end industry’s current status and an outlook on its development over the next months. The LIPI is distributed as a free e-newsletter edited by international strategy consulting firm The Bridge To Luxury (www.thebridgetoluxury.com)

INDUSTRY STATUS AND MAJOR TRENDS:

For the third consecutive month the LIPI has gone up. Given a relative stable environment (no major new developments with regard to US-Sino trade talks, Brexit, Hong Kong etc.) and positive quarterly company reports (e.g. Lauren, Cucinelli, Burberry), the index has gained 0,3 basic points compared to October.

While also important economic factors such as oil prices or currency exchange rates have remained relatively constant, one factor will have to be observed in the near future: China inflation. Within a year prices in the world’s most important luxury market have almost risen by 3,8%. Having already lowered GDP growth expectations for 2020 twice this year to 6,1% and to 5,8%, IMF forecasts may have to be adjusted downwards again in light of further augmenting consumer prices.

Also to look at: The US administration indicated higher import tariffs on French luxury good in retaliation for a digital service tax. Levies could amount for up to 100% on $2.4bn imports from France.

Market capitalizations of stock-listed luxury companies grew by 3,9% in November beating other industry indexes (S&P 500, Euro Stoxx, Nikkei 225, Shanghai Composite). Investors’ fantasies were also driven by the by now officially announced LVMH-Tiffany take-over focussing on rumours about Hugo Boss or talks between Moncler and Kering’s Gucci.

According to Bain’s new luxury report, 2019 revenues for personal luxury goods (watches, fashion, jewellery) have grown by 4% to €281bn (const. rates). Other insights: 12% of global sales are triggered online. The second hand business is already absorbing 9% market share. Bain expects the customer base to grow from 390 to 450 million potential consumers by 2025.

COMPANY SNAPSHOTS:

Tesla will receive state subventions for its Chinese-built Model 3 cars. Meanwhile, recently announced Tesla’s Cybertruck has accumulated more than 250.000 orders.

BMW intends to set-up a factory in China for its electric MINI and partnering Great Wall Motors capacity (160k units p.a.).

Porsche funds automotive technology firm Tactile Mobility. The start-up creates software that seizes car-road interactions.

Investor Stroll seeks a stake in Aston Martin resulting in soaring shares of the traditional British manufacturer of sports cars.

Daimler is said to launch its first Maybach SUV in 2020. The group also reports to cut 10.000 jobs in the next three years.

EssilorLuxottica aims at a mid-single digit CAGR until 2025 (constant exchange rates).

Burberry announced a cooperation with China’s Tencent to improve its digital presence in the country.

Despite disappointing Q3 sales and profits due to less spending tourists in the US and Hong Kong, Tiffany & Co.’s share price remains high in context of the company’s acquisition by LVMH.

Moët Hennessy has acquired a majority stake in rose wine producer Chateau d’Esclans (France).

Marriott Hotels (St. Regis, The Ritz-Carlton) has announced the launch of more than 30 luxury hotels in 2020.

Japanese cosmetics firm Shiseido has opened its first domestic factory in 36 years with two more to come next year.

Snap cooperates with Gucci on limited-edition of 3D augmented reality spectacles. u Italian fashion brand Brioni ties up with Lalique in a licensing partnership.

McLaren chose Tumi as luggage partner to increase line-extension efforts.

TBTL LUXURY INDUSTRY PERFORMANCE INDEX (11/2019)

(A) Development share prices in the luxury industry (in %)

TBTL LUXURY INDUSTRY PERFORMANCE INDEX (11/2019)


TBTL LUXURY INDUSTRY PERFORMANCE INDEX (11/2019)

TBTL LUXURY INDUSTRY PERFORMANCE INDEX (11/2019

SELECTED UP-COMING LUXURY INDUSTRY EVENTS:

Paris Haute Couture January 20-23 Paris Fashion

Maison d’Objet January 17-21 Paris Household goods

Vicenzaoro January 17-22 Vicenza Jewellery

Copenhagen Fashion Week January 28-31 Copenhagen Fashion u NYC Fashion Week (Men) February 3-5 New York Fashion

Milano Unica February 4-6 Milano Fashion & accessories

NYC Fashion Week (Women) February 7-12 New York Fashion

Inhorgenta February 14-17 Munich Watches & jewellery

The full list of 2020’s events is available at TBTL’s homepage: www.thebridgetoluxury.com (“news”)

The Bridge To Luxury

info@thebridgetoluxury.com Tel.: +49 351 2002

444 Keppgrundstrasse 18 01259

Dresden Germany www.thebridgetoluxury.com

ABOUT US: The Bridge To Luxury (TBTL) is an international strategy consultancy firm, focusing exclusively on high-end brands, products and services. TBTL and its global network support owners, management and investors on luxury related topics: market assessments and research, strategy and branding, product development, communications including social media, distribution and internationalization, organization and restructuring, business modelling and evaluation, m&a.

TBTL appreciates any suggestion for additional performance indicators of the luxury industry to be incorporated into this monitor.

DISCLAIMER The Bridge To Luxury (TBTL) believes the information in this report are accurate and complete. Information presented were obtained or derived from sources TBTL considers reliable, but TBTL makes no representations as to their accuracy or completeness.

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