Over the past 15 years, many of us have seen our incomes squeezed by recessions, a pandemic and inflation. So you might expect the demand for luxury goods to have fallen. But the sector is thriving. Ben Laidler, global markets strategist at investment platform eToro, notes that according to consultants Bain, the value of the personal luxury-goods market – beauty products, watches, jewellery and shoes – has almost tripled from €122bn to €354bn since 2002.
The trend has been a boon for the producers of these items and their investors. Jamie Ross, portfolio manager of Henderson EuroTrust, notes that if you’d invested in luxury conglomerates such as LVMH a decade ago, you would “have received annual returns of around 25%”. Fortunately, it’s not too late to jump in, as the sector still has ample room for growth.
Perhaps the main reason the sector has shrugged off the financial crisis and the pandemic in the past 20 years has been “the consistent growth in both the number and level of wealth of the world’s wealthiest people”, says Aidan
