The total proceeds of the biggest luxury retailers during the last financial year increased by 11%, which is twice as much as the average annual sales rates in 2015-2017. The average net profit margin of the 100 biggest companies is almost 10%.
“This market continues to develop dynamically. The number of its adherents is growing,” said Konstantin Sheleg, analyst of the investment company Rietumu Asset Management.
According to forecasts of economists, by 2030 the share of the middle class among the entire population of the planet will exceed 60%. This being the case, Deloitte, which makes an annual list of the top 100 biggest global luxury brands, informs us about a new key trend. Specialists warn that manufacturers of luxury products are getting ready to apply the maximum of their marketing efforts to expanding their audience, in order to cultivate the taste of a pampered lifestyle among consumers who are not yet wealthy but have good earnings.
This new class of potential clients of the luxury market has been named HENRY (High-Earners-Not–Rich-Yet).
Statistically, on average HENRY is 43, he earns USD 136 000 a year and has less than USD 1 Mln in investment assets. He does not care about heritage and the traditions of a brand, but he has already started valuing exclusivity, quality and style. Moreover, being a typical hero of his time, he draws close attention to the social and ecological impact of the company and its ability to comply with modern tendencies.
Let’s note that the leading seller of luxury brands remains Italy, whereas the leader in sales growth turns out to be France. “One of the manufacturers that is adapting to the new reality most successfully and is implementing new strategies is LVMH, headquartered in France – the owner of the Louis Vuitton brand. This French brand is actively communicating with its fans in social networks, shows them exclusive video clips about the launching of new products and also participates in charity campaigns on different platforms,” said Konstantin Sheleg.
And, in the world of business, the best proof of success of the creative strategy of LVMH is its financial performance. During the first three months of this year, this leader of the luxury industry has increased its sales by 16%.
Stocks of LVMH are included in the Brands&Luxury themed investment portfolio, formed by Rietumu Asset Management for its clients. This portfolio also includes securities of other leading international brands, which are a benchmark of quality and prestige for millions of people worldwide.
More about the Brands & Luxury portfolio can be found
here.
Eleonora Gailisha Mass Media and Public Relations
Phone: +371-67020506
Fax: +371-67020563
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