Luxury industry in sparkling form, beats multiple records

Luxury industry in sparkling form, beats multiple records


Translated by

Nicola Mira

The luxury sector was in excellent health in 2021, and leading groups are keen to maintain their margins in 2022, despite rising costs and inflationary pressures, which are expected to lead to price increases.

Al Pacino for Saint Laurent – Saint Laurent

Global luxury giants have reported financial results for 2021 that exceeded, in some cases significantly, those recorded before the pandemic, thanks in particular to outstanding performances in Asia and the USA.


KeringGucciBottega VenetaHermès generated close to €9 billion in sales, with a net income that was nearly €1 billion higher than before the pandemic, at €2.44 billion.

Swiss group RichemontCartier

Such rude financial health did not surprise analysts. In its annual study published in November, Bain

Restrictions to business caused by the pandemic and inflationary risks will not be dampening the enthusiasm of luxury groups, which are approaching 2022 in confident mood.

“We have an advantage over quite a few other companies and groups, in that we are able to have a certain flexibility in our pricing, so that we have the means to react to inflationary pressures,” said LVMH’s CEO Bernard Arnault

“Labels are working on their appeal”

Price flexibility “is one of the luxury industry’s main features,” said Swiss bank UBSLouis Vuitton

“Every new season, we create a new collection, and we review our entire pricing matrix,” said François-Henri Pinault, CEO of Kering, speaking at the group’s results presentation. And while Pinault has for some time been lamenting “massive rises in transport costs,” he also attributed retail price increases to the fact that “labels are working on their appeal,” by means of “product sophistication” and by “going upmarket” with “products whose prices are increasing.”

“In some cases, demand is exceeding supply, which means that consumers will both keep on buying and agree to pay higher prices,” indicated HSBCRolex

Hermès, faced with “very high” demand for its products, usually raises its prices once a year, according to its boss Axel Dumas

The fact that handbags are hand-crafted means that they “may be less subject to energy and raw material costs than other products,” he added.

Price increases should be handled with care however: Arnaud Cadart, portfolio manager at Flornoy, said that “[price rises] might hinder consumption,” adding that “there are limits. When the price of a €1,000 handbag climbs to €1,200 overnight, it can slow down demand.”

By Katell PRIGEN

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