Even though the economy continues to struggle, some luxury brands are still making a healthy profit and expanding. According to The Economist (subscription), Moët Hennessy Louis Vuitton is expanding and acquiring “like a mini Germany”.
The CEO, Mr. Arnault, has expanded their brand over the last quarter-century from a small clothing manufacturer to a conglomerate that controls over 60 brands. Some of those brands include Christian Dior, Bulgari, Sephora, DFS, and Berluti, and the fashion conquistador is making a move on Hermès, a bag and silk scarf and tie firm.
Another spectrum of luxury firms is also seeing sales growth: automobile brands. Toyota (TM)’s Lexus brand hopes to sell 250,000 vehicles this year, which is a 25% increase over last year. Lexus sales have recovered from a lack of inventory due to the earthquake and tsunami in Japan last year that shut down factories and supply lines. The brand’s U.S. sales climbed 74% from this quarter a year ago.
Business Section: Investing Ideas
Despite dismal times for the economy, luxury brands have continued to expand and grow their profitability.
This growth could be due to the fact that luxury brands cater to the wealthier consumers, who have not been hit as hard by the struggling economy.
Use Kapitall tools to analyze the businesses of some higher fashion luxury stocks. Do you think they will continue to ignore the market conditions and thrive?
Interactive Chart: Press Play to compare changes in market cap for TIF, COH, KORS, LULU, and TRLG:
Interactive Chart: Use the Turbo Chart to compare the stock performance of TIF andCOH against the performance of the S&P 500 Index (SPX):
(Written by Danny Guttridge)