The rebound of the (partial) 2021 financial statements for brands in all luxury segments has a very specific characteristic: that of going beyond the levels of 2019, when the pandemic had not yet transformed our lives. And if almost all of them are succeeding, there is a reason. Four, in fact
The pandemic has tightened luxury to the ropes, but it hasn’t knocked it out. Quite the opposite, in fact. The (almost) post-Covid that we are currently experiencing has generated an almost opposite trend. Many are calling it a ‘rebound‘, but one where the height reached is greater than the previous peaks. That is: in 2019. This is how it works, at least for the best players in the segment, the large multinational groups, which, thanks to their resources and structures, have been able to feed on lymph composed of 4 elements:
1 > China,
2 > digital,
3 > sustainability,
4 > young consumers.
Four big shots of a commercial jigsaw that are joined together, above all, by a particular production specialty: leather accessories, which are worth on average more than a third of brands revenues. Even if, for the big luxury conglomerates, this percentage is higher.
The luxury rebound
The locomotives
For Hermès, the pandemic has turned into a boost. In the third quarter of 2021, revenues were € 2.37 billion, up 40% on the same period in 2019. In the same quarter, LVMH‘s turnover increased by 11% in 2019 to € 15.5 billion. Bernard Arnault’s battleship thanks (officially) the leather goods lines of Louis Vuitton, Dior, Fendi, Celine and Loewe. Kering had sales of € 4.19 billion, +10% in 2019. A moderate growth due to the slowdown of Gucci (only +3.8% in 2020).
Bottega Veneta did well (but not so well), while Saint Laurent was flying. Richemont stood at € 4.5 billion in sales, +23% in 2019, with the “Other” division, which includes fashion brands, up 10% in 2019. Missing from the roll call is Chanel. Its executives simply say it will close 2021 with double-digit growth (thanks also to continued price hikes) after an 18% drop in 2020 closed at $ 10.1 billion.
Independent labels
Independent fashion houses are busy looking for a strategy for success. A strategy that could last a year, while waiting for travel shopping to resume and, this time in positive terms, shuffle the cards on the table once again. Let’s start with Moncler: quarterly turnover of 555.5 million euros, +55% in 2020 and +33% in 2019. Brunello Cucinelli is close behind with revenues of 188.8 million, up 12.5% in 2020, and Zegna: 603.3 million in revenues and +49.9% compared to last year in the last 6 months.
Burberry is also smiling, with sales of 1.21 billion pounds in the last 6 months and up 45% in 2020. And, with him, Ralph Lauren enjoys it, with revenues of 1.5 billion dollars (+26% on last year). Salvatore Ferragamo‘s quarterly growth over 2020 was 17.4%, Tod’s 14.6%. Aeffe‘s brands (Pollini, Moschino, Alberta Ferretti, Philosophy) returned positive by 6.3%, but they all remain (together with Tod’s and Ferragamo) below the levels of 2019 if we evaluate the trend of the nine months: -21% for the Florentine brand, -6.9% for the group led by Diego Della Valle, -7% for Aeffe.
Accessible luxury
Affordable luxury has been able to take advantage of a lower average price and the boost from the North American market, which is rebounding more than expected. For example, Steve Madden in the third trimester of 2021 (July-September) posted its highest sales ever: $ 528.7 million, up 5% on 2019. Coach shines (+15% on 2019), which led Tapestry by the hand at +9% compared to the pre-pandemic figure (in value: $1.48 billion).
Then there’s Versace which grew 45% in 2020, trailing Capri Holdings at $ 1.3 billion, +17% in 2020. VF Corp reported $ 3.2 billion (+23%), missing forecasts of $3.5 billion due in part to the weak performance of Vans (+7%). PVH’s momentum was excellent: in the May-July quarter, it reported sales of $ 2.3 billion (+46% on 2020), with Tommy Hilfiger up 41% and Calvin Klein up 56%. Outside the US, the German group Hugo Boss made a good impression: sales of € 755 million: +7% in 2019.
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