Lamborghini, Aston Martin & Dior: Why are the world’s luxury brands recession proof?
Luxury brands are yet to feel the cold wind of recession, with luxury names including Aston Martin, Lamborghini, Bentley and Dior all posting a surge in revenues in 2023.
The companies all cite the “resilience” of their wealthy customers in an otherwise tough economic market.
Lamborghini is the latest to appear to shrug off soaring inflation rates and supply chain issues; the Italian car maker posted a turnover of €2bn (£1.7bn) and reported sales of 9,000 vehicles in the year.
Paolo Poma, the managing director and chief financial officer of Lamborghini, said: “2022 was our best year ever on all financial and business fronts. It means we can take an optimistic outlook on the growth of our brand and our company,”
Despite the average shopper scaling back on spending in wake of the cost of living crisis, it appears the ultra rich have yet money to pump into luxury vehicles, Aston Martin also revealed it was on track to take in £2bn by 2024/25.
“Luxury brands like Lamborghini have benefited from the resilience of their wealthy customers against the cost-of-living crisis,” Myron Jobson, senior personal finance analyst at Interactive Investor, told Morning Wire
He continued: “The ability to offset heightened cost pressures arising from a tight labour market and high energy price by increasing the price of goods without losing customers has proved to be a key strength for many luxury brands.”
Luxury fashion brands have also been appearing to perform better than their more affordable counterparts.
For example, French designer Christian Dior recorded revenue of €79.2bn (£69bn) in 2022, as fans of the expensive brand were still keen to splash out on its perfumes and handbags.
This is in contrast to US-retailer Gap who saw its net sales fall six per cent to $15.6bn (£12.7bn) as shoppers on a tighter budget shied away from the retailer.
Investors also appear to have confidence in the longevity of high couture with shares in Dior up 0.57 per cent today.
Jobson continued: “Solid returns on luxury stocks have benefited investors in what has been a difficult year for stock markets, as inflation and rising interest rates continue to weigh on performance. The burning question now is whether these shares have more room to run higher.”