Investing in the luxury market appears to be paying off against all odds.
Shares in three of the industry’s biggest players rose early on Wednesday morning amid widespread economic uncertainty and geopolitical unrest. LVMH shares climbed 1.4 percent, Richemont shares traded up 0.6 percent and Hermès shares rose 1.4 percent, as reported by Reuters. Kering shares were also on the up by the late morning.
The spike came just a day after LVMH posted strong third-quarter results and declared that “growth continues at the same pace.” Bernard Arnault’s luxury behemoth recorded revenue of roughly $54.8 billion (€56.5 billion) in the first nine months of 2022, up 28 percent compared to the same period last year. The boom in sales indicates that shoppers have not lost their appetite for high-end designer goods, even in such tumultuous times.
LVMH said sales in Europe, the US and Japan have rocketed since the start of the year due to the ongoing demand of local clients and the recovery of international travel. Well-heeled Americans have also taken advantage of the dollar’s strength in the UK and Europe, purchasing pricy items while the exchange rate is in their favor.
Although some analysts are concerned the luxury sector may face darker times ahead, LVMH is confident in the continuation of current growth and the resilience of its affluent client base. “Luxury is not a proxy for the general economy,” LVMH chief financial officer Jean Jacques Guiony told analysts in a conference call on Tuesday.
Guiony noted that watches and jewelry had performed particularly well in the past nine months. Indeed, the category was up 23 percent compared to the same period last year and pulled in around $7.3 billion (€7.6 billion) in revenue. He added that these products in particular tend to do well in an inflationary environment because they hold their value. He also highlighted that there had been a shift in purchases of silver jewelry to gold jewelry at Tiffany & Co.
Hermès and Kering will be reporting third-quarter sales on October 20. Perhaps you should buy a few more shares now before another spike.
