Luxury flies high: here are all the first-half reports 

Luxury is flying high despite the energy crisis and the consequent emergency suffocating the industry and consumers. Brands and large groups are closing the first half of 2022 with stellar balance sheets and seem to remain relatively optimistic about the trend in the second. Let’s take stock of the situation


It is difficult to say what will happen until the end of 2022 in such a critical and volatile context, but luxury is flying high and, together with many groups in the premium segment, closed the first half of the year at full speed. Not only that: it also sees a rosy future, contrary to the perceptions of the supply chain and consumers who fear a very hard winter, with spending cuts to cope with high energy prices and inflation.

Luxury flies high

The latest reports from luxury groups make it clear that sales in China, slowed so far by Beijing’s zero Covid strategies, showed signs of recovery in June and July. Those in the USA, albeit at a slower pace than in the past, are still growing, while Europe has been buoyed by the return of American tourists, benefiting from the dollar-euro exchange rate. It is no coincidence that European shopping, coupled with growth in South Korea, is the most promising prospect, while the threat is mainly recession (in Europe and the US).

So far, so good

‘So far, so good’ is the comment of Luca Solca (senior luxury sector analyst at consultancy firm Bernstein) on the first half-year of the luxury industry. “Despite significant concerns about closures in China, the second quarter and first half numbers were very good indeed. Of course, a recession would have dampened growth, but – as LVMH CFO Jean-Jacques Guiony said – we are entering the second half of the year with strong momentum.(source Vogue Business).

All first-semester balances

Hermès is likely to be the most resilient luxury player in a recession, as well as a safe haven for those looking to take cover,” says Solca. The French fashion house not only reported a 23% increase in revenues and created 800 new jobs but also posted an operating margin of 42%, the highest level in the industry. All this while raising prices less than its competitors. Kering grew 16%, thanks to the boom of Saint Laurent (+34%), but suffered from the slowdown of Gucci (+8%). LVMH grew 21% and, thanks to higher sales prices, posted a substantial increase in operating profits and margins.

To continue with the French, Chanel, which only reports annual figures, recorded double-digit growth in the first five months of 2022. The lowest common denominator of the results of these top brands is leather goods, which are booming and making the fortunes of the various brands. To conclude with the luxury giants, we come to Richemont, focusing on the ‘Other’ category, which brings together the fashion and accessories brands it owns. The category recorded a 28% rebound in revenue. Better than jewellery, watches, and online retailers, ça va sans dire.

Boss’s bang

Italian luxury travels at the wheel of the transalpine giants. Brunello Cucinelli scores +28% (and expects 2022 to be a record year), Moncler does +27%, Prada +22%, Zegna and Tod’s +21%, Salvatore Ferragamo +17%. In the USA, Tapestry (which owns the Coach, Kate Spade, and Stuart Weitzman brands) closed the year 2021-2022 with record sales (+15% in 2021). Also doing well was Capri Holdings (which controls Michael Kors Jimmy Choo and Versace), which closed the first quarter on 2 July with an annual increase of 8.5% (Versace +14.6%).

But best of all, Hugo Boss with a leap in half-year sales of 42%. A real bang. In the group of purely footwear brands, the +48% of the Pollini brand and the +45% of Steve Madden are worth mentioning. In the spring, Dr. Martens and Caleres had reached record sales. Ugg (-2%) and, above all, Vans (-7%) performed poorly.


How will the sector move in the second half of the year? “I don’t think investors are afraid of inflation, but rather of the risk of recession in Europe and the US. The market is anticipating a sharp slowdown,’ says HSBC‘s Erwan Rambourg.

But even in the event of a recession, luxury is a more protected sector than others. Mario Ortelli (Ortelli & Co) argues that ‘in the event of a recession, luxury clients are the last to enter a crisis and the first to exit’. Adam Cochrane of Deutsche Bank Research predicts a deceleration of overall growth from +15-20% in the first half of the year to around +10% in the second half. ‘Despite the economic slowdown, I don’t think there will be a big slowdown in luxury,‘ the analyst explains.

Another variable will be the behaviour of China, which is difficult to predict. While the strong dollar, which fuels price differences between markets, is not a cause for concern. A weak euro is helpful for luxury brands that produce in Europe and sell elsewhere, Cochrane concludes: ‘You have an expansion of margins, significantly if you are already raising prices to cover the increased costs of raw materials and transport. (mv)

Read also: