Luxury in full recovery, boom in Asia and the USA - Lifestyle

The luxury market is in full recovery. In 2020, the sector proved defensive, quickly overcoming the economic crisis and in 2021, sales are accelerating rapidly due to the fast improvement of the Chinese economy, which managed to reach the pre-COVID level. There is still no normalization of sales for which we will probably have to wait until 2022. China remains a strong consumer of luxury products and the main driver of demand, while the strength of the American market was a positive surprise. However, the delay in vaccination campaigns and the lack of international tourists affected sales on the European market.We will therefore have to wait for a more significant return of interregional tourism to recover the 280 billion dollars of annual income on a global scale, and thus confirm its return to normal. These are the analyzes of Arthur Jurus, senion strategist of the Franco-German group Oddo Bhf reported on the Luxury Tribune.

, says Jurus, who even speaks of a

i.

The numbers speak for themselves:

, announced on Monday July 26 that it had exceeded

its pre-pandemic half-yearly global sales by

at € 28.7 billion for a net profit of € 5 billion. 3 billion (+64% compared to 2019).

recorded an increase of

compared to the pre-Covid19 period and a turnover of 8 billion euros.

also well positioned, it recorded an

first quarter (off year)

compared to 2019 and a turnover of 4.3 billion euros, driven in particular by the performance of its two jewelery brands

. In addition, the performance of European luxury values ​​is

.

In 2021,

grew by 40%, Richemont by 33%, LVMH by 25% and Kering by 20%.

. LVMH's recent results show this: revenues increased by 14% compared to the second quarter of 2019 and margins increased by 5.5 percentage points to 26.6%. The outlook is also favorable for Richemont: the average annual growth of its jewelry houses could therefore reach 12% in the next two years, against a pace of 10% before the crisis.

"That the unbridled appetite of consumers has shown itself without restraint, fear or sense of guilt, as occurred during the previous major crises caused by the 9/11 attacks or the 2008 crisis. The vaccination campaigns orchestrated since the spring have visibly market optimism has been brought back, "says Jurus.

Among the emerging trends: Chinese consumers' "appetite" is growing, product collections are on the rise,

.

"These prospects are positive for the luxury sector, which has confirmed its attractiveness among investors," he explains.

On the one hand, global M&A operations have been dynamic since the start of the year and have reached over $ 1.2 trillion per quarter.

This attraction also involved luxury, where transactions were significant (LVMH on Tiffany, VF Corporation on Supreme, Moncler on Stone Island). 

Asia is one of the main sources of sales of luxury goods: + 86% of sales for LVMH in the first half of the year, + 53% for Kering and + 40% for Richemont at 30 June). According to the analyst, the boom "will slow down inexorably, as the effect of general excessive consumption in reaction to lockdowns is temporary. And the need to rethink the production model, which is still too much based on excessive consumption, will become urgent. Many are now turning to more sustainable models, starting with upcycling ".