The normalization of the luxury goods industry was confirmed in the first half of 2024, with a slowdown observed among all the big names in the sector, as a direct consequence of the freeze on sales in China. Only Hermes is bucking the downward trend, on the strength of a highly desirable product and a loyal customer base.
Luxury companies have given their verdict for the 1st half of the year.
One quarter after another looks very similar for the luxury goods sector. Faced with a complicated consumer environment due to inflation, and sluggish growth in China, luxury companies are finding it hard to increase their sales.
However, those that have performed well are continuing to do so, while those that were in the red are staying there.
Hermès, Prada and Moncler maintain double-digit growth
One publication follows another for Hermès. Once again, the world’s number 3 luxury goods company by market capitalisation has reported double-digit sales growth, up 15% on a comparable basis (excluding the currency effect). Moreover, all its geographic regions reported double-digit growth, and half-year net profit was up by 6.3%.
These figures are all the more satisfying given that the luxury goods sector is in a phase of slowdown, or even negative growth, while the geopolitical context is complex. All regions reported positive growth, with the exception of China, where demand remains sluggish.
Hermès’ strengths remain its model of artisanal production and its exclusive distribution network, with new and extended shops. The group can also count on the loyalty of its customers around the world.
As for the Italian luxury group Prada, both sales and operating profit rose in the first half, exceeding analysts’ expectations. This new performance was mainly due to retail sales of the Miu Miu brand, which almost doubled under the creative direction of Miuccia Prada. Miu Miu now accounts for almost a quarter of group sales. Prada shares have risen by 30% since the start of the year on the Hong Kong stock exchange.
The other top-of-the-range Italian brand that is doing very well is Moncler, whose sales rose by 11% in the first half of the year. The Moncler House, which accounts for more than 80% of group sales, was buoyed by strong growth in Japan, driven mainly by tourism, as well as a positive performance on the Chinese mainland.
On the other hand, Stone Island, the group’s other brand, recorded a fall in sales in the second quarter, mainly due to the weak performance of its wholesale network.
Richemont reassures
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Featured photo : © Moncler
