- Luxury Fashion Equities Outperform High Street Brands
- Resilience in the Prestige Market Amid Cost of Living Crisis
- Mixed Performance Among High-Street Brands and Luxury Retailers
London Fashion Week begins this Friday and continues through Tuesday, September 19; however, which top brands are best positioned to keep your portfolio looking chic?
In the last five years, luxury fashion equities have generated returns that are more than four times those of their high street counterparts, according to an analysis by the trading platform eToro.
The top 10 luxury fashion equities, including LVMH and Hermès, have recorded a growth rate of 90 percent in the last five years, against 23 percent among their high street counterparts, according to the data.
The figures include the ten largest British and European luxury and high-street fashion retailers by market capitalization, and demonstrate a degree of resiliency in certain segments of the prestige market during the cost of living crisis.
Over the past five years, according to eToro, luxury brands have outperformed Europe’s Stoxx600 by a ratio of four to one.
However, the findings indicate that some high-street brands have gained ground over the past year as a result of declining inflation and rising wages.
Since 2018, both luxury and mainstream merchants in the United Kingdom and Europe have outperformed the broader European stock market.
The market value of LVMH has increased by 163% over the past five years, while Hermès has experienced a growth rate of 241% during the same period.
Hugo Boss and Prada have experienced growth of 30% and 21%, respectively, since the beginning of 2023, while many well-known high-street brands have experienced more modest growth.
Inditex, the parent company of Zara, has grown by 21% over the past five years, second only to H&M, which has grown by 26%.
In the past five years, Next shares in the United Kingdom have increased by 25%, while JD Sports shares have increased by approximately 47% over the same period.
According to eToro, the worst performer was Asos, which experienced a 94 percent decline in its stock market value.
In the third quarter of its fiscal year, Asos reported revenues of £ 858,9 million, a decrease of 14% year-over-year. According to eToro’s data, Asos shares have declined by approximately 25% so far this year.
Ben Laidler, global markets strategist at eToro, stated, “The high street brands deserve credit for successfully navigating this challenging economic environment, as their collective share prices have outperformed the European stocks average.”
However, the share price decline of Asos is a stark reminder of how unforgiving and competitive the industry can be, he continued.
This emphasizes the significance of adaptability and creativity in the fashion industry, which is constantly evolving.
‘As the sector continues to evolve, we can expect to see further adjustments in the fortunes of these mainstream brands.’
Be mindful that when selecting equities, it is important to look beyond past returns, but this does not guarantee future growth.
