Savigny Luxury Index October 2011 | Source: Savigny Partners

LONDON, United Kingdom — The market roller coaster continues, but the luxury sector has once again outperformed the general market. While questions remain about the ability for China to sustain the growth of luxury brands, investors seem to be on side again, at least for now. Analysts remain divided about the future of the luxury sector in 2012, amid much macroeconomic uncertainty.

Big news

• Renewed confidence in the sector prompted the SLI to recover the ground it lost from the mass sell-off in September.  The SLI posted an impressive increase of 21.9 percent over the month of October, versus an increase of 7 percent in the MSCI.

• Positive newsflow has boosted the sector, with LVMH, Burberry, PPR and Coach’s quarterly results beating market expectations.  Swatch announced that September was a record month for the group and that 2011 promised to be its best year ever.

• Investor concerns over a slowdown in China were addressed as all major sector players confirmed the Chinese market’s resilience.

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Savigny Luxury Index July 2011 | Source: Savigny Partners

LONDON, United Kingdom — Over the past few days, international markets have plummeted in the face of growing uncertainty about the global economy, in particular the debt crisis in Europe and the downgrade of US treasuries by Standard & Poors. In this month’s Market Pulse, we analyse the market’s strong performance in July and provide a market update from the first few days of August.

Big news

• H1 results beat expectations across the board, prompting companies to upgrade their estimates for 2011.  In particular LVMH and Hermès both posted EBIT increases in excess of 20 percent, driven principally by growth in China and the USA.  Hermès upgraded its sales forecasts for 2011 to +12-14 percent, the only cloud on the horizon being its low inventory levels.

• PPR and LVMH step up their investment in the watch sector, respectively with an increase in shareholding to 50.1 percent in Sowind (Girard-Perregaux, JeanRichard) and the acquisition of La Fabrique du Temps, a specialist watchmaking workshop.

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Savigny Luxury Index March 2011 | Source: Savigny Partners

LONDON, United Kingdom — This month’s Market Pulse shows a continuing upward trend for luxury and fashion stocks versus the MSCI World market benchmark, erasing any lingering doubts about the return of the luxury consumer.

Big news

• Luxury brands have had an excellent start to the year reporting strong Q1 results. Double digit sales growth has been fuelled by continued strong growth in China and economic recovery in the US and Europe

• The Savigny Luxury Index made a big jump mid-April when Burberry and bellwether LVMH announced better than expected results, prompting share price increases amongst their European peers

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Shizuka Fujioka, Yu Kimura and Misako Aoki | Source: Daylife

Japan’s Ambassadors of cute (FT)
“Economists are now looking at Japan and going: ‘Well, they don’t have the economic clout they had before, but they have a kind of soft power in view of the incredible global popularity of manga and anime.’”

Prada’s core profit up 3 percent in 2009 (Reuters)
“Italian fashion house Prada said 2009 core profit rose 2.8 percent to 290 million euros ($389.8 million), boosted by a rise in more profitable retail sales even as its wholesale business declined.”

Safilo sees flat Q1 sales as Asia, U.S. recover (Reuters)
“Italian eye-wear maker Safilo (SFLG.MI) forecast flat first-quarter revenues on Monday after reporting a 2009 net loss as the global crisis hit sales and led to hefty writedowns.”

16-Year Old Girl Gives Best Day Ever To E-Commerce Site (Business Insider)
“Thanks to a 16-year old girl, a small e-commerce site had its best day ever, as they detail in a blog post. No, not because of a mad spending spree with dad’s credit card, but a viral video.”

Twiggy: It could have gone terribly wrong (AP)
“Back in the Mod ’60s, when Twiggy conquered London and fashion changed forever, the waif of a teen with huge eyes, a boyish bob and long legs craved the glamour and curves of a different icon.”

D&G Autumn/Winter 09 | Source: Dolce & Gabbana

‘Affordable Luxury’ Bucks the Crisis (NY Times)
“Tommy Hilfiger just opened a 22,000-square-foot store on Fifth Avenue in Manhattan, a move that, in this economy, some might call insane. But the Hilfiger line, like many midrange designer brands, is growing, while other labels, notably at the high end, are struggling to hang on to market share.”

Fighting Back Against Shoppers’ Guilt (WSJ)
“Guilt has always been part of the shopping experience. But retail executives say it has become such an overriding emotion among shoppers since the economic crisis set in last year that it is delaying the recovery of the luxury-goods industry.”

Tom Ford to design women’s wear (Independent)
“Ford, who previously designed women’s wear as creative director for Gucci, said that he and his business partner Domenico de Sole were currently on the lookout for financing, but that the new line was likely to launch next fall.”

Debt-laden Safilo agrees plan, new key shareholder (Reuters)
“Italian eyewear maker Safilo said Dutch shareholder Hal Investments would end up owning up to half the company under a 283 million euros ($424 million) recapitalisation plan.”

Now Unveiling Undercover’s Jun Takahashi (NY Times)
“Jun Takahashi, the Japanese designer behind the cult label Undercover, is as reclusive as he is recondite. In a rare interview, The Moment caught up with Takahashi after his recent Paris showroom presentation.”