00:00Sebastian Huber is a luxury researcher. Joining me now, Sebastian, just explain, it seems like a bit of an anomaly
00:07what we're seeing in the luxury sector.
00:10Well, yes, we see both a recovery to some extent, but not just as much as investors expected.
00:17So when we look at LVMH especially, I think there was bigger expectations and just some consensus now that there
00:24is a stable situation ahead of us,
00:27but not as promising as the previous years used to be.
00:30So that leaves investors with a worry towards the upcoming holiday season, which is the most important season for the
00:37luxury industry as it is.
00:39So if we look across, I think it's the big four, Hermès, Kering, LVMH, Richemont, who's actually getting it right?
00:46Well, I think there's very different groups to compare in regard to their exposure to different markets and different categories.
00:56LVMH is very diverse, both in geography and in its various segments, from jewellery to fashion to spirits,
01:04and therefore the picture is a bit more diverse, whereas Hermès maintained a very strong foothold in maintaining brand relevance,
01:13maintaining a very clear positioning with consumers all around the world,
01:17and therefore is gaining more from this rebound than LVMH, which may need to bring up to speed each of
01:25its categories,
01:25each of its divisions and each of the markets one by one.
01:29You also look at trends. Why is jewellery having a moment?
01:33Well, in times of uncertainty, jewellery is seen as an investment and therefore has more appeal than fashion,
01:39which comes in faster cycles.
01:41Also, jewellery has a bigger share of high net worth and ultra high net worth consumers
01:46that usually spend pretty much independent on the current situation and circumstances.
01:54So it's both an investment and a slightly different clientele that attracts jewellery more than fashion.
02:00On the other hand, fashion can also cycle back much more quickly with the right design,
02:05the right brand desirability and the right services around it.
02:08And some of the brands are prone to turn the ship around.
02:12China and the U.S. dominating this market.
02:16So how much do they differ in terms of what they want?
02:20Very much. I think the China macroeconomics are different from the U.S.
02:26and also the role of local brands is quite different.
02:30So if we look again at LVMH, Tiffany being a U.S. brand with a strong U.S. clientele
02:36and good macroeconomics has benefited more in the recent quarters than some brands in China,
02:42where some of the consumer behavior is still lagging behind expectations,
02:47where also the recent price frenzy, especially in handbags,
02:53but also in some of the fashion items, has scared customers away
02:56and they're more conscious about the value that they get from the luxury products that they purchase.
03:01Well, thank you so much.
03:02Sebastian Huber is a luxury researcher.
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