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The Savigny Luxury Index grew 2 percent in January, as the luxury business shows further signs of recovery. A number of brands ended 2017 with sales growth, with LVMH, Richemont and Swatch all reporting significant increases. Luxury is poised for growth in the United States thanks to new tax cuts, but index author Savigny Partners cautions that economic and geopolitical movements such as currency shifts and tensions could have a negative affect on the market.
?The U.S. tax reform is boosting the overall mood,? said Ludovic Granchamp, partner at Savigny Partners, London. ?If you pay $1 million in taxes and you suddenly have only half to pay, $500,000, you feel like investing more but also spending more, and as buying luxury is a bit of both, happy days ahead.? A measurement of stock performance of about 20 publicly traded luxury companies, the Savigny Luxury Index outperformed the MSCI in January, which only rose 1.5 percent in the same timeframe.
From the beginning of the month to Jan. 31, companies such as Richemont, Kering, Swatch and Estée Lauder saw their share prices grow between 1 and 7 percent.
Prada Group shares saw the biggest bump, growing 12.9 percent. Savigny attributes this to improved trading in China, a key market for Prada. A comparably late adopter of ecommerce, Prada has also launched an online store in China.
Major groups including LVMH, Richemont and Swatch have all noticed a rebound in demand in China Along with Prada, another ...