There's no Covid that holds. on the stock exchange, luxury and fashion continue to travel at full sail, despite the economic crisis triggered by the pandemic putting a strain on the accounts of large and small companies.
After a few months of difficulty, coinciding with the first wave of infections, the securities of the sector have reversed the trend and, especially in Europe, have started to run again in the last two months. So much so for 2021 many analysts estimate double-digit increases for both sales and profits. Deutsche Bank, in particular, expects sales of luxury companies to rise by 18% this year, while profits will grow by 95% despite concerns due to new infections in China.
THE CHINA
And China is precisely the basis from which to start to understand the trend of luxury stocks, which generate the vast majority of their revenues in the People's Republic. In the first months of 2020, the economy of the Asian giant experienced an unprecedented setback. The first infections of what would soon become a pandemic that brought the world to its knees started from Wuhan. But if Beijing was the first to suffer the economic consequences of the emergency, it was also the first to restart and in 2020 China was the only major country globally to maintain positive growth. Last year, GDP increased by 2,3% in real terms, a result made possible thanks to the surge recorded in the last two quarters, when gross domestic product grew by +4,9% (third) and +6,5 .2019% compared to the same periods of XNUMX.
FASHION AND LUXURY: WHAT THE CHINESE MARKET IS WORTH
According to a report published by Jefferies, the value of luxury goods spending in China grew exponentially in 2020, rising from 38-39% of the global market in 2019 to 80-85% in 2020. Simply put, while the rest of the world fought with the second and then with the third wave of infections from Covid-19, China got back on its feet, starting to spend and invest again. The result is that “over the next five years we expect a slight decline from this 80% level, but it is clear that we will never return to the 38% level of 2019. Luxury spending will continue to weigh in China between 55 and 60% of the total market,” said Flavio Cereda-Parini, managing director Luxury Equity at Jefferies.
FASHION AND LUXURY: THE RANKING OF THE RAISES
Thanks to the Chinese recovery, the entire fashion and luxury sector has managed to put the difficulties caused by the pandemic behind it and to achieve stock market gains which - in some cases - are staggering.
The data shown below are updated to the values of 4 February for US securities and the morning of 5 February for European securities.
Given the necessary premises, to win the ranking of the increases, with a gap of over 300% on the runner-up is Farfetch, a British company that built its fortune on e-commerce, selling fashion, luxury and design products from over 700 boutiques and brands around the world. Since February 3, 2020, the stock, listed on the NYSE, has gained 459,4% of its value, rising from 12 to 67,13 dollars per share against a market capitalization of 22,816 billion.
In second place there is Fossil, US giant which has brands such as BMW, Michele Watch, Skagen Denmark, Misfit, WSI, and Zodiac Watches in its portfolio and produces licensed accessories for Puma, Emporio Armani, Michael Kors, DKNY, Diesel, Kate Spade New York, Tory Burch, Chaps and Armani Exchange. On the Nasdaq, Fossil shares are worth $15,85, up from $3 on Feb. 2020, 6,66. The increase is 138%.
With the third position we return to Europe and more precisely to Germany. On the third step of the podium we find in fact Zalando, the German online sales giant that recently announced its intention to focus on sustainability, reaching a 2023% share of volumes from more sustainable products and carbon neutral deliveries in 20. In the last 12 months, the share, listed in Frankfurt, recorded an increase of 118,5%, reaching 97,9 euros per share.
Wooden medal for L Brands. The company that owns brands such as Victoria's Secret and Bath & Body Works, after the +9,35% recorded in the session of Thursday 4 February, brings its annual balance sheet to + 103,9% to $48,07. It follows in fifth place Iconix Brand Group, US brand management company that licenses brands to retailers and manufacturers such as Kohl's, Kmart, Sears, Macy's and others. In the session of 4 February, the stock fell by 11%, but despite this, in one year the value of the shares increased by 89,1%.
In sixth position we find the Danish jewelry company Pandora, whose value grew by 70,1%. They follow Prada, seventh with an increase of 66,4% in Hong Kong, e Amazon, octave with +60,2%. The top 10 is closed by the Japanese Fast Retailing (+57,6%) and the US Abercrombie & Fitch (+ 55,4%).
THE GIANTS OF EUROPEAN LUXURY
As of October 2020, the market capitalization of lvmh, the world's largest luxury giant, amounted to 216 billion. Today it is 265,852 billion. In just over four months, the share of the group led by Bernard Arnault gained 28,1%, reaching new all-time highs. Over the 12 months, the increase is 27,5 percent.
How are the arch-rivals doing? Richemont it has a market capitalization of 48,552 billion Swiss francs, approximately 45,5 billion euros. During the first wave of Covid-19 infections, the stock (which was worth 3 francs per share on 2020 February 73,54) fell to a low of 46,64 francs per share. Today it is worth 85,92 for an annual increase of +16,8%. In recent days, the company has published its results for the third quarter of fiscal 2020, which closed with sales up 1% and revenues of 4,18 billion euros, mainly driven by Asia Pacific, the Middle East and Africa. Positive year also for Hermes, which has gained 12% on the Paris Stock Exchange in the last 29,6 months against a capitalization that has risen to 94,268 billion.
On the other hand, those who have not yet managed to recover their losses on the stock market are Kering, which has dropped 2020% since February 2,3. It's even worse in Madrid Inditex. The giant that owns Zara, thanks to the lockdowns and the consequent economic crisis, has left 16,7% of its value on the street in the last year.
AND THE ITALIANS?
The only title to run is Moncler, which gained 12% in the 25,43 months. The 6-month performance even marks +57,12%, a sign that even for the company led by Remo Ruffini the most difficult months are now behind us. Recover lost ground Brunello Cucinelli, which thanks to the sprint of the last six months (+33,31%) closes the year with an increase of 1,49%. Salvatore Ferragamo on the other hand, it dropped 10,5% from 5 February 2020, but rose by 6% in the 38,19 months. They try to bounce even too Tod’s (-27,53% in 12 months, +16,47% in 6 months) e Ovs (-38,6% in the year, +16,14 since July).
