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Brands ensure positive outlook for the luxury sector in 2019

"The not-so satisfactory 2018 results of luxury brands Tiffany, Ferragamo, Tod’s and Prada has not deterred them from maintaining a positive outlook for 2019. This is on account of improving brand sales. Ferragamo has already witnessed an improvement in its same-store sales. Similarly, Prada and Tiffany are still on a growth trajectory, despite a softening in recent trading. On the other hand, operating profit of luxury group Hermes crossed the €2 billion ($2.2 billion) mark, yet it failed to achieve 2017’s record level of profitability owing to higher input prices."

 

Brands ensure positive outlook for the luxury sector in 2019The not-so satisfactory 2018 results of luxury brands Tiffany, Ferragamo, Tod’s and Prada has not deterred them from maintaining a positive outlook for 2019. This is on account of improving brand sales. Ferragamo has already witnessed an improvement in its same-store sales. Similarly, Prada and Tiffany are still on a growth trajectory, despite a softening in recent trading. On the other hand, operating profit of luxury group Hermes crossed the €2 billion ($2.2 billion) mark, yet it failed to achieve 2017’s record level of profitability owing to higher input prices.

App to ensure customer satisfaction

Galeries Lafayette’s new flagship on the Champs-Elysées is revamping operations at its department store by focusing on stylesBrands ensure positive outlook for the luxury sector or trends, spanning gender and product categories. The store allows customers to book an appointment with one of 300 personal stylists who use an app to upload customer preferences besides recording their selections, photos of fittings and measurements.

The app can be used to talk to the stylist before, during and after the store visit. The retail group is also rolling out intelligent hangers which display the sizes of the garment that are in stock. The customer can click on their size and have it brought to the fitting room.

Beauty sector remains active with several transactions

There were several transactions in the beauty sector as well. Bain Capital acquired Maesa, a French beauty contractor and brand incubator, in a secondary buyout. Barcelona-based cosmetics group Puig made investments in emerging markets with the purchase of a minority stake in Kama Ayurveda, the leading Indian Ayurvedic brand, for some €12.5 million ($14 million), and Colombian beauty retailer Loto del Sur. Blog-inspired US beauty company Glossier also announced a $100 million Series D funding led by Sequoia Capital. The company, is now valued at $1.2 billion.

London based accessories company, ASHS, which trades under the Anya Hindmarch brand, was sold to the Marandi family, a UK investor with interests in property, hospitality and fashion. The Savigny Luxury Index (“SLI”) further solidified its gains in March as investors look forward to improving prospects for the sector in 2019; our index posted a 5.5 percent increase versus just over 2 percent for the MSCI World Index.

A threat to the industry

A study commissioned by Walpole shows, the UK’s luxury industry lobby group, a no-deal Brexit is estimated to cost the British luxury sector $8.9 billion Whilst it is clear that Britain in general and London are the prime losers of this saga, the rise of nationalism throughout Europe and the rest of the world could develop into a major threat to the luxury industry.

 
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