Article: Luxury goods trend
Luxury goods trend
2023 marked a record for the luxury goods sector, with Millennials and Generation Z, representing a third of the market, driving growth. As style icon Coco Chanel stated, luxury becomes a necessity when primary needs are satisfied. In a world where the concept of luxury is being redefined, objects such as exclusive sneakers or NFT works of art, despite their low intrinsic value, are now considered luxurious for their uniqueness and rarity alongside iconic pieces such as the Royal Oak by Audemars Piguet or Hermès Kelly.
Demand for luxury goods remains high despite challenges such as market volatility, geopolitical tensions, Covid and inflation. This highlights that, for those who can invest for the long term or wish to own a unique collectible, luxury represents an attractive option.
As wealth shifts to new generations, Millennials and Generation Z, along with women, will become the primary beneficiaries of this shift, with a potential wealth transfer of more than $80 trillion by 2045 in the United States. Companies in the sector are recording record profits, and according to forecasts, the luxury sector will grow at a CAGR of more than 7%, reaching almost 400 billion euros in 2025.
The consumer of the future will be young, female, of American or Chinese nationality, with a growing influx of consumers from China and young Americans who have enriched themselves with cryptocurrencies. In the watch industry, the "Big Four" - Rolex, Patek Philippe, Audemars Piguet and Richard Mille - stand out for their sales, innovation and desirability.
Investing in luxury companies offers financial benefits, such as stable cash flows and growing earnings records. Luxury companies, driven by high margins, become less cyclical and enjoy the arrival of nouveau riche eager for innovative and iconic brands.
Despite the increase in prices due to inflation and raw material costs, luxury customers are not discouraged, confirming the solidity of the sector.
Demand for luxury goods remains high despite challenges such as market volatility, geopolitical tensions, Covid and inflation. This highlights that, for those who can invest for the long term or wish to own a unique collectible, luxury represents an attractive option.
As wealth shifts to new generations, Millennials and Generation Z, along with women, will become the primary beneficiaries of this shift, with a potential wealth transfer of more than $80 trillion by 2045 in the United States. Companies in the sector are recording record profits, and according to forecasts, the luxury sector will grow at a CAGR of more than 7%, reaching almost 400 billion euros in 2025.
The consumer of the future will be young, female, of American or Chinese nationality, with a growing influx of consumers from China and young Americans who have enriched themselves with cryptocurrencies. In the watch industry, the "Big Four" - Rolex, Patek Philippe, Audemars Piguet and Richard Mille - stand out for their sales, innovation and desirability.
Investing in luxury companies offers financial benefits, such as stable cash flows and growing earnings records. Luxury companies, driven by high margins, become less cyclical and enjoy the arrival of nouveau riche eager for innovative and iconic brands.
Despite the increase in prices due to inflation and raw material costs, luxury customers are not discouraged, confirming the solidity of the sector.
