- The luxury market is experiencing a significant shift in fortunes, with a clear divide emerging between high-end brands and more affordable options.
- According to estimates from UBS, Richemont and LVMH are the leading brands that appeal to the ultra-wealthy and high net-worth individuals (HNWIs).
- The data suggests that the rise in luxury sales in the Asia-Pacific region increased by approximately 40% in each of the first three quarters of 2023 compared to two years prior.
The luxury market has long been a symbol of status and extravagance, with brands such as LVMH, Richemont and Hermès leading the pack.
However, as the world’s wealthiest individuals continue to indulge in high-priced handbags and jewellery, a growing gap is emerging between these luxury powerhouses and the brands favoured by aspirational buyers.
Recent trends have revealed a divergence in the industry, with £3,000 bracelets and £400 sneakers experiencing contrasting success. Analysts from UBS believe that this polarisation will manifest in two ways, as larger luxury brands outperform smaller ones, while the top-tier segment of the market outshine the aspirational segment.
Edouard Aubin, an analyst from Morgan Stanley, also noted that HNWIs are the driving force behind growth in the coming years, with high-end brands such as Richemont and LVMH focusing experiences toward consumers with large spendable incomes.
Ultra-HNWIs looking to purchase luxury items from top luxury brands should use a safe online money transfer service.
Popular luxury brands such as Brunello Cucinelli have experienced significant sales growth over the last year and exceeded their targets. Others, such as Burberry, have issued profit warnings due to declining sales and now are attempting to gain favour with HNWIs worldwide.
According to experts, HNWIs are also favouring brands such as Cartier over brands such as Gucci and Burberry.
Similarly, Cartier has overtaken Kering (more specifically Gucci) in popularity, with Kering’s sales forecasted to decline 4% this year.
The hard luxury sector, which includes jewellery and watches, has proven to be more resilient than anticipated. While leather goods and handbags have historically been the go-to luxury items for consumers, the rising prices and saturation of these products have led to a shift in consumer preferences. As a result, jewellery has gained in popularity, offering a fresh alternative to the traditional luxury market.
Wealthy consumers looking to purchase luxury items should research secure ways of making international payments.
HNWIs can read our money transfer comparison reviews and compare exchange rates.
