Why Do The Three Luxury Groups Kaiyun, LVMH And Hermes Group Grow Against The Current

Since the beginning of the year, due to the repeated epidemic situation, political tension and other factors, both domestic and foreign retail sales market is shrouded in a layer of "cold", but luxury goods, a subdivision industry, is still crazily "absorbing money".

Recently, the three major luxury goods groups, Kaiyun, LVMH and Hermes, released their third quarter and first three quarter financial reports respectively. From the financial report, the "gloomy" environment of the retail market has not affected the luxury industry. The revenue and growth of the three luxury groups in the third quarter of 2022 are quite impressive.

Kaiyun group In the first nine months, revenue increased by 23.15% to 15.067 billion euro, including 23% year-on-year growth in the third quarter to 5137 million euro, 14% increase excluding exchange rate factor, higher than the 12% growth expected by analysts. By region, Western Europe, Japan, North America and the Asia Pacific region grew by 74%, 31%, 1% and 7% respectively year-on-year. By brand, Gucci's third quarter sales increased by 9% to 2581 million euro, Saint Roland by 30% to 916 million euro, baodiejia's revenue increased by 14% to 437 million euro, the revenue of other brand departments of barische increased by 13% to 995 million euro, and the glasses Department increased by 21% to 253 million euro. Jean Marc duplaix, chief financial officer of Kaiyun group, said in a conference call that the Chinese market had improved from the second quarter, but "has not yet returned to normal.".

LVMH group In the first nine months, revenue reached 56.484 billion euro, up 27.79% year-on-year, and the third quarter sales increased 19% to 19.755 billion euro. Among them, the income of fashion leather goods business increased by 31% to 27.823 billion euro, that of beauty and perfume business increased by 19% to 5.577 billion euro, that of watch and jewelry business increased by 23% to 7.575 billion euro, and that of boutique retail business increased by 30% to 10.095 billion euro. By region, LVMH's sales in Europe rose 36% year on year in the third quarter, with 11% and 30% growth in the United States and Japan, respectively. Asian markets excluding Japan reversed the 8% decline in the previous quarter, recording a 6% increase. Although the situation in China has improved compared with the second quarter, the store traffic has not returned to normal.

Hermes International SCA In the first nine months, the revenue increased by 30% to 8.611 billion euro, and the third quarter sales reached 3.136 billion euro, a year-on-year increase of 32.5%, excluding the exchange rate factor, an increase of 24%. Hermes saw growth in all businesses in the third quarter, with revenues in the leather and harness division growing 21% to 1.305 billion euros, clothing and accessories business increasing by 50.7% to 919 million euros, silk and textiles business revenue increasing by 30.7% to 208 million euros, and watch business increasing by 67.7% to 139 million euros. By region, income in Asia, America and Europe increased by 21.1%, 28.3% and 26.1% respectively.

It is worth mentioning that the performance of the three luxury groups exceeded analysts' expectations.

In addition to the three major luxury goods companies, the rest of the luxury companies also showed strong growth in the latest financial report.

For example, the parent company of Cartier and van der Waals, Richemont group, had a sales volume of 5.264 billion euro in the three months ended June 30, 2022, with a year-on-year increase of 16.47%; Hugo Boss group's sales soared 40% from April to June 2022 to EUR 878 million. Prada group's performance in the first half of 2022 increased by 22.5% to 1.9 billion euro, and its net profit increased by 93.6% to 188 million euro; Salvatore ferraga mor also showed strong growth, with sales of 630 million euro in the first half of 2022, with a year-on-year increase of 20.23%; In the first half of this year, Lanvin of Fosun Group increased by 73% to 202 million euro.

Why can luxury goods industry continue to go up under the premise of uncertain overall economic environment? The financial reports of LVMH, Kaiyun and other enterprises show that the "richest customers" can still show "perseverance" even in economic adversity, and are basically unlikely to be affected by inflation or unemployment. At the same time, according to Zhou Ting, President of VIP Research Institute, the growth of luxury goods is divided into incremental market and stock market. Incremental market refers to the entry of potential consumers, while stock market refers to repeated consumption of original consumers. However, the impact of the epidemic situation and other objective factors is the share of the incremental market. Most of the consumers' consumption ability in the stock market has not been affected, even because some countries' loose monetary policies have led to the growth of their wealth and consumption ability.

Even though many luxury goods companies, such as LVMH, Kaiyun and Prada, said in their reports that the performance of the Asia Pacific market was generally unsatisfactory, which was mainly affected by the Chinese market. However, according to Bain's China luxury market report 2021, the scale of China's luxury market is still growing, and it is expected to become a global luxury market in 2025. At the same time, Hainan Island tax-free business and online sales may become a new growth point of China's luxury industry.