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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
We’ve no reason to share this other than it’s mildly interesting:
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European luxury stocks are having a tough year, with the sector down ~18 per cent in the past three months.
Growth slowed in the third quarter and PE multiples have compressed, with Louis Vuitton, Moncler, and Kering all making cautious noises about 2024. It’s all tighter consumer spending and China and stuff.
The above chart, which uses data cribbed from RBC Capital Markets, adds the angle that since the pandemic, the bottom has fallen out of online lux. Here are a few highlights:
Visits in August and September were down across 12 brand websites by an average of 20 per cent. It’s a similar story for July, with only Dior.com visits in positive territory.
Website visits to Burberry.com have fallen every single month of 2023. Since October 2021 it has only registered one month of improvement, November 2022, in which visits were up 1 per cent.
Gucci.com hasn’t had a positive month since January 2022.
Veblen goods companies have taken a cautious approach to online retail, preferring to build their own storefronts than rely on resellers and multi-brand platforms. The pandemic spurred a wave of investment, with online luxury sales nearly doubling from 12 to 22 per cent of the total in 2021. The share had been expected rise to as much as 30 per cent by 2025, per a widely cited Bain & Company report.
Given recent trends, that target now looks ambitious. They’re all doing well by Instagram follower count, though:
Further reading:
— Why luxury brands are investing in online retail (Luxe Digital)
— R/DesignerReps (Reddit)
