Edition vii market update
By Maryem Manseur & Ava Wildstein
State of the Economy:
2022 marks the beginning of a renaissance of sorts for the global luxury goods industry. Fashion houses have bounced back from pandemic-related losses, and the luxury market is likely to reach a $295-435 billion valuation by 2025. This sector is especially relevant to our future as many current millionaires are concentrated within the 18-44 age bracket. The meaning of luxury for millennials and Gen Z is drastically different from that of their predecessors, and many younger wealthy individuals want their fashion to not only reflect the extravagance and freedom that comes from a luxurious lifestyle, but also a positive societal shift. Luxury brands are making a conscious effort to transform the malpractices that tarnish their legacies, becoming increasingly transparent, environmentally conscious, and socially responsible. Purchasing something from a luxury brand is a privilege, and both companies and consumers are eager for this industry to symbolize not only wealth and status, but also strong ethics and equality.
With such a saturated market however, longtime legacy brands were forced to evolve to maintain their market power. By tapping into technological advancements, luxury brands have entered the Metaverse of fashion with many traditional brands dropping NFT collections that appeal to younger consumers. Another growth opportunity for legacy brands is in e-commerce. Investing in building out their online presence and capitalizing on the expanding e-commerce market is another area where legacy brands can maintain their influence in the industry and sustain growth as the market continues to recover from pandemic losses.
Moncler: Market Cap: $16.25B USD
Moncler is a French and Italian-owned luxury fashion brand known for its cold weather attire. The brand was founded in 1952 by Rene Ramillon and Andre Vincent, taking its name from the French Alpine town Monestier-de-Clermont. Moncler was bought by Remo Ruffini in 2003, who transformed and reinvented the nearly bankrupt company. The brand went public on December 16, 2013, with an initial value of €10.20 per share. Today, Moncler has recovered fast from its pandemic-caused fallout. Sales increased by 30% within the final quarter of 2021, as well as 44% for the full year. Moncler recently acquired the luxury menswear line Stone Island, causing year-end revenues to reach €2.05 billion in spite of the predicted €1.99 billion. The winter quarter is Moncler’s most profitable season, and in comparing December 2021 sales figures to that of 2020 and 2019, there is a 20% and 30% increase, respectively. Moncler recently announced that it would go completely fur-free by the end of 2023. This decision will protect animal welfare and likely increase the brand’s customer base.
Burberry: Market Cap: $23.82B USD
Burberry is a British luxury fashion house with headquarters in London, England. The brand is known for its ready to wear attire, including trench coats, leather goods and accessories. Burberry was established in 1856 by Thomas Burberry with an original focus on outdoor attire. In 1997, Victor Barnett was appointed chairman of Burberry, leading the company to its successful IPO in 2001. Burberry has bounced back from pandemic-related losses, predicting to increase full-year profits by 35% in 2022. The brand is trying to reinvent itself and attract younger shoppers, rolling out a new retail format across 55 stores by the end of fiscal 2022. In addition, Burberry recently announced that it would become a “climate positive” company by 2040, committing to the reduction of chain emissions by 46% by 2030.
Levi Strauss & Co: Market Cap: $8.605B USD
Levi’s have always been regarded as a staple brand for denim. Founded in San Francisco in 1853 by Bavarian immigrant Levi Strauss, the Levi’s brand has always prioritized quality in all of their products. Nearly 200 years later Levi’s is still maintaining its commitment to quality and has grown to over $8 billion market capitalization, making it a sizable specialty brand. The quality of their products goes hand-in-hand with their sustainability efforts which are appreciated by younger generations looking to purchase ethically produced clothing. Levi’s jeans have been repopularized among younger generations since thrifting has become mainstream with the help of TikTok and other fashion blogging platforms. In the past year, Levi’s has seen an incredibly high Gross Margin of 58.06%, a strong signal that it will continue to be a stable legacy brand for decades to come.
Sources: https://www.shopify.com/enterprise/ecommerce-fashion-industry#2
https://www.luxuryfacts.com/index.php/sections/article/The-Renaissance-of-Global-Luxury-What-to-Expect-in
https://www.voguebusiness.com/companies/burberry-full-year-2021-results-turnaround
https://www.cbsnews.com/news/moncler-fashion-fur-free-2024/
https://www.reuters.com/business/retail-consumer/moncler-2021-sales-top-2-billion-euros-beating-expectations-2022-02-24/
2022 marks the beginning of a renaissance of sorts for the global luxury goods industry. Fashion houses have bounced back from pandemic-related losses, and the luxury market is likely to reach a $295-435 billion valuation by 2025. This sector is especially relevant to our future as many current millionaires are concentrated within the 18-44 age bracket. The meaning of luxury for millennials and Gen Z is drastically different from that of their predecessors, and many younger wealthy individuals want their fashion to not only reflect the extravagance and freedom that comes from a luxurious lifestyle, but also a positive societal shift. Luxury brands are making a conscious effort to transform the malpractices that tarnish their legacies, becoming increasingly transparent, environmentally conscious, and socially responsible. Purchasing something from a luxury brand is a privilege, and both companies and consumers are eager for this industry to symbolize not only wealth and status, but also strong ethics and equality.
With such a saturated market however, longtime legacy brands were forced to evolve to maintain their market power. By tapping into technological advancements, luxury brands have entered the Metaverse of fashion with many traditional brands dropping NFT collections that appeal to younger consumers. Another growth opportunity for legacy brands is in e-commerce. Investing in building out their online presence and capitalizing on the expanding e-commerce market is another area where legacy brands can maintain their influence in the industry and sustain growth as the market continues to recover from pandemic losses.
Moncler: Market Cap: $16.25B USD
Moncler is a French and Italian-owned luxury fashion brand known for its cold weather attire. The brand was founded in 1952 by Rene Ramillon and Andre Vincent, taking its name from the French Alpine town Monestier-de-Clermont. Moncler was bought by Remo Ruffini in 2003, who transformed and reinvented the nearly bankrupt company. The brand went public on December 16, 2013, with an initial value of €10.20 per share. Today, Moncler has recovered fast from its pandemic-caused fallout. Sales increased by 30% within the final quarter of 2021, as well as 44% for the full year. Moncler recently acquired the luxury menswear line Stone Island, causing year-end revenues to reach €2.05 billion in spite of the predicted €1.99 billion. The winter quarter is Moncler’s most profitable season, and in comparing December 2021 sales figures to that of 2020 and 2019, there is a 20% and 30% increase, respectively. Moncler recently announced that it would go completely fur-free by the end of 2023. This decision will protect animal welfare and likely increase the brand’s customer base.
Burberry: Market Cap: $23.82B USD
Burberry is a British luxury fashion house with headquarters in London, England. The brand is known for its ready to wear attire, including trench coats, leather goods and accessories. Burberry was established in 1856 by Thomas Burberry with an original focus on outdoor attire. In 1997, Victor Barnett was appointed chairman of Burberry, leading the company to its successful IPO in 2001. Burberry has bounced back from pandemic-related losses, predicting to increase full-year profits by 35% in 2022. The brand is trying to reinvent itself and attract younger shoppers, rolling out a new retail format across 55 stores by the end of fiscal 2022. In addition, Burberry recently announced that it would become a “climate positive” company by 2040, committing to the reduction of chain emissions by 46% by 2030.
Levi Strauss & Co: Market Cap: $8.605B USD
Levi’s have always been regarded as a staple brand for denim. Founded in San Francisco in 1853 by Bavarian immigrant Levi Strauss, the Levi’s brand has always prioritized quality in all of their products. Nearly 200 years later Levi’s is still maintaining its commitment to quality and has grown to over $8 billion market capitalization, making it a sizable specialty brand. The quality of their products goes hand-in-hand with their sustainability efforts which are appreciated by younger generations looking to purchase ethically produced clothing. Levi’s jeans have been repopularized among younger generations since thrifting has become mainstream with the help of TikTok and other fashion blogging platforms. In the past year, Levi’s has seen an incredibly high Gross Margin of 58.06%, a strong signal that it will continue to be a stable legacy brand for decades to come.
Sources: https://www.shopify.com/enterprise/ecommerce-fashion-industry#2
https://www.luxuryfacts.com/index.php/sections/article/The-Renaissance-of-Global-Luxury-What-to-Expect-in
https://www.voguebusiness.com/companies/burberry-full-year-2021-results-turnaround
https://www.cbsnews.com/news/moncler-fashion-fur-free-2024/
https://www.reuters.com/business/retail-consumer/moncler-2021-sales-top-2-billion-euros-beating-expectations-2022-02-24/