Luxury equities had another tough go around last week. The FSW Markets All Luxury Index was down 4.3 percent. This was just over 2 points lower than returns for the S&P 500 and the CAC 40.
There was quite a bit of diversity among top luxury names, however, and the below bar plot shows the five day returns for a number of luxury assets (blue bars) as compared with some benchmarks (red), and the EUR-USD exchange rate (green) is thrown in for good measure.
The industry’s large caps continued to sink over the past week as investors continue to worry about the industry’s cyclical slowdown and are increasingly concerned that it forebodes a structural weakening due, in great part, to weaker demand in China. The titan LVMH was down 3.8 percent on the week and is now down 18 percent on the year while Hermès and L’Oréal were down 3.6 and 4.7 percent, respectively.
On the upside, Burberry’s release of its “Burberry Forward” strategy on Nov 14 led to a 13 percent surge. This took one of the industry’s worst 2024 performers to a mere 0.33 percent decline year-to-date. Lastly, the end of the Tapestry and Capri Holdings Limited tie up was greeted positively by investors this week.
You can read the views of the FSW Markets team on the new Burberry strategy in this November 14 discussion with Glossy magazine.