Luxury at the crossroads

Period Return
2.4%
Return Rank
Below Average
Risk Exposure
Above Average

Watches, fragrances and apparel form the backbone of consumer luxury brands

Entertaining ambiguity about what luxury is, with various strategies to convince clientele of exclusivity and with intention to dominate luxury categories such as watches for some, companies make the theme difficult to define

Over time, some strategies have clearly been more successful than others

  • The combination of a core business in mid-range watches with higher end licenses (Michael Kors, Armani, Coach/Tapestry) marked the turnaround of Fossil
  • Richemont has over many years abandoned initial interests in the tobacco business to focus on jewelry (Cartier, van Cleef & Arpels), watches (Jaeger-LeCoutre and others) and writing (Montblanc)
  • Kering – after a venture in sports with Puma (bought in 2007 and spun-off in 2018) – announced a renewed focus on luxury goods 
  • Hermès and Prada never left the high-end, building a coveted brand name with single-minded attention to quality, control over distribution and reputation

 

LVMH , Richemont and EssilorLuxottica are attractive BUYs if the U.S. economy continues to perform since approx. a quarter of the global luxury market is US-related

Theme Components
Name
Ticker
Sector
Industry
Cur. Price
Mkt. Cap
Performance
Momentum
Risk Rank
Risk Contrib
 
Fossil Inc. FOSL Consumer Non-DurablesApparel, Footwear & Accessories - Major6.81387 M222.3% Neutral High Risk
PVH Corp. PVH Consumer Non-DurablesApparel, Footwear & Accessories - Major92.924.1 B18.0% Weak Up Above Average
Ralph Lauren RL Consumer Non-DurablesApparel, Footwear & Accessories - Major397.5324 B26.6% Weak Up Below Average
Burberry Group (ADR) BURBY Consumer Non-DurablesApparel, Footwear & Accessories - Major14.28--11.0% Neutral Average Risk
The Estee Lauder Companies EL Consumer Non-DurablesCosmetics & Personal Care104.7740 B19.9% Weak Up Above Average
Coty COTY Consumer Non-DurablesCosmetics & Personal Care3.483.0 B-12.8% Strong Up Above Average
L'Oreal (ADR) LRLCY Consumer Non-DurablesCosmetics & Personal Care97.96-17.9% Weak Up Below Average
Tapestry TPR Consumer DurablesLuxury Brands120.7624 B11.6% Neutral Average Risk
Swatch Group (ADR) SWGAY Consumer DurablesLuxury Brands11.04-7.1% Neutral Below Average
Compagnie Financiere Richemont (ADR) CFRUY Consumer DurablesLuxury Brands20.26-1.5% Neutral Below Average
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