The world’s top 10 luxury companies contributed just shy of half of the top 100 companies’ total sales, and despite a downturn, several are reporting double digit growth as consumers’ keenness to spend ramps back up.
“The luxury goods industry has faced a number of changes over the past two decades,” Deloitte said in its newly published Global Powers of Luxury Goods 2018 report. Be it uncertain economic trends, rapid digitization or changing shopper preferences, the industry is in the midst of a new landscape where old ways won’t hold—and all of that is reshaping what luxury looks like. “Whether total global market growth is single or double digits will depend on many factors, including larger geopolitical factors and their impact on tourism. Even so, growth in the luxury goods industry will continue, unlike in several other industries.”
The world’s top 100 luxury goods companies sold $217 billion worth of goods in fiscal year 2016, according to Deloitte, a growth rate of just 1 percent and considerably lower than the 6.8% growth the previous year. The top 10 companies raked in $102 billion.
The sector is however, bouncing back. In short, luxury sales at the end of 2017 neared $1 trillion, 57 of the top 100 companies saw year over year sales growth, Italy led the sector in terms of number of luxury companies, and France-based companies held the highest share of sales.
“There is evidence that 2016 marked the end of the slowdown in luxury goods sales growth for most of these companies,” Deloitte said.
LVMH, which tops the list of 10, saw sales reach $23.4 billion in fiscal 2016, a 5 percent growth that contributed to its command of 11 percent of the top 100 luxury goods sales and more than a quarter of the profits. Early fiscal 2017 reports point to as much as 17.2% growth in sales for LVMH.
“All LVMH’s personal luxury goods segments achieved sales growth,” Deloitte said. “Fashion and leather goods, which contribute 60 percent of LVMH’s personal luxury goods sales, were up 3 percent, with solid momentum achieved by their star brand, Louis Vuitton…as well as by Kenzo, Fendi, Loewe, Céline and Berluti.”
For Kering, fifth on the list, its luxury sales growth was up 7.7% to $9.4 billion for fiscal 2016, and for fiscal 2017, its growth nearly quadrupled to 27.5%.
“Online sales by Kering’s luxury brands increased by 22 percent in 2016,” Deloitte noted in the report. “Leading brand Gucci’s online sales recorded substantial growth, driven by the roll-out of the new gucci.com website, and other digital initiatives.”
Ralph Lauren took the No. 8 spot on the list—the only one of 10 that wasn’t profitable—with sales growth down more than 10 percent to $6.65 billion in fiscal 2016, while PVH Corp. rounded out the list of apparel related companies, taking the No. 9 spot with 5.6% growth and $6.64 billion in luxury goods sales for its Calvin Klein and Tommy Hilfiger brands.