According to a study by investor platform eToro, the market capitalization of luxury brands has evolved much more favorably than that of fashion brands and chains. Luxury fashion stocks have generated returns more than four times higher than those of their ready-to-wear counterparts over the past five years.
In the stock market, it’s better to invest in luxury fashion stocks than in mid-range or low-end ready-to-wear… even if the latter have not, for all that, fallen short in recent years.
With London Fashion Week just getting underway in London, with 80 designers, some 50 shows and a host of presentations, the investment platform eToro has just published an interesting study. It shows that, while luxury fashion houses go all out with expensive shows during fashion weeks, they often reap the rewards in terms of attracting stock market investors.
Looking at the performance of Europe’s top ten luxury fashion and ready-to-wear retailers in terms of market capitalization, eToro found that luxury fashion brands had “clearly outperformed their ready-to-wear counterparts” over the past five years.
The top ten luxury fashion stocks have grown by 90% over the past five years, compared to a more modest +23% for their ready-to-wear counterparts.
Hermès and Lvmh lead the way
Unsurprisingly, LVMH and Hermès lead the luxury pack, reaping “the rewards of their strong brand identity, pricing power and customer loyalty”. Over the past five years, Hermès’ stock market value has soared by 241%, and that of the world’s number one luxury goods company by 163%!
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Front page photo: Nic Shi/Unsplash