Published on : Thursday, April 6, 2017
In March this year, Savigny Luxury index (“SLI”) rose a very respectable 6.6 percent, while the MSCI World Index (“MSCI”) flat-lined. An array of good results announcements, along with signs of continuation of growth in luxury markets around the world and all-important tourist flows, put a momentum for SLI.
Hermès announced record-breaking profits for 2016, adding to the series of positive results announcements over the last couple of months. Moncler, Brunello Cucinelli and Tiffany also posted strong numbers, notably lifted by sales in China for all three companies. Tourists were also seen traveling to Europe. Tax free sales grew by 21 percent in January, the second consecutive month of growth after a year of decline.
In the same manner, the Middle Eastern luxury market has seen a recovery, thanks to increased oil prices and also increased tourist flows from India and Africa. Even some of the bigger players in the watch sector are beginning, although very cautiously, to feel hopeful for 2017. Industry observers expect the Internet to account for 20 percent of luxury sales within a decade.
In the world of luxury mergers and acquisitions, March was a busy month, especially for the big groups like De Beers, Richemont, Cartier and LVMH. However, some big names like Burberry and Mulberry felt the bite of Brexit, weighed down by the prospect of higher input prices. These two stocks were the only ones in negative territory in March, although marginally.