Savigny Luxury Index January 2012 | Source: Savigny Partners

LONDON, United Kingdom — It’s been a strong start to 2012 for the luxury good sector, as equity markets made significant gains in January.

Big news

• The Savigny Luxury Index (‘SLI’) outperformed the benchmark MSCI World Index (‘MSCI’) by 6 percentage points, gaining 11 percent over the month of January, relative to an increase of close to 5 percent for the MSCI.

• Investors have been exposed to continued good news.  Indeed almost all luxury groups have announced outstanding Christmas trading and 2011 year-end results driven mainly by growth in Asia excluding Japan.

• However, uncertainties have not dissipated.  Although the US market seems much better, Europe remains a concern, with sector sales highly dependent on tourist spending.

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Crocs store Holland | Source: Open Travel

How Crocs Moved from Fashion Trend to $1 Billion Phenom (Forbes)
“If they weren’t exactly running out to buy a pair of those bulbous bright resin (please don’t say rubber) clogs sprinkled with holes, investors sure are clamoring to snap up stock in Crocs Inc (CROX). The company whose fugly footwear has been the foundation of its business just announced it expects its full-year revenue to exceed $1 billion for the first time in its 10-year history. The news made share prices jump 17 percent this morning.”

Tiffany loses lustre amid sluggish sales (FT)
“Shares in Tiffany & Co fell 10.5 per cent to $59.94 as the luxury retailer it cut earnings guidance after reporting anaemic holiday same-store sales growth in the US and a decline in sales at its New York store.”

The Pre-Autumn Leaves Start Changing Color (NY Times)
“Now that the presentations of pre-fall collections are being treated as a major event and not just a warm-up for the fall runway shows, the idea that these are supposed to be more commercially friendly designs seems to have gone out the window, and no one seems quite sure what to make of them.”

Moschino Cheap & Chic moves to London Fashion Week (Telegraph)
“Moschino’s diffusion line Cheap & Chic is to move its catwalk show to London for the autumn/winter 2012 shows. Rumoured to be showing on Saturday February 18 at a mystery location, this will be the collection’s first show outside of its usual slot on the Milan Fashion Week schedule, where the Moschino mainline remains.”

Straight Talk: A New Breed of Fashion Bloggers (NY Times)
“Not every fashion blogger is a 15-year-old girl with an unhealthy obsession with Rei Kawakubo. Some are older. And some are men… Some are old hats who have embraced the digital age to spread their dandy message. But many more are fashion newbies — videographers, publicists and everyday retail hustlers who speak for a new generation of style-conscious men.”

Savigny Luxury Index November 2011 | Source: Savigny Partners

LONDON, United Kingdom — As the luxury and fashion sector enters the critical holiday shopping period on the back of strong results for the first half of the year, there are growing signs that executives are worried about what the future holds for the luxury market in 2012.

Big news

• This has been another month of record results for the luxury sector, with Hermès, Richemont, Ferragamo, Burberry, Tiffany, Prada and Ports all posting outstanding numbers for their first half or third quarter period.  Buoyant growth in Asia continued to lift sales; Richemont in particular shone with revenues in the region soaring by 60 percent in its first half report.  Growth was also present in mature markets, notably in the USA where Burberry’s first half sales and Tiffany’s third quarter revenues rose by 25 percent and 17 percent respectively.  This was confirmed by recent news of a very strong Thanksgiving weekend, with US retail sales estimated at a record $52.4 billion.

• Yet worries are growing over 2012.  The global markets rebound which took place towards the end of November following news of concerted action to solve the eurozone debt crisis did not happen for the luxury sector, with our Savigny Luxury Index resuming its downward slide.  Some market participants have issued thinly veiled warnings over next year, notably Richemont and Tiffany (see below).  Retailers are keeping inventories low into the end-of-year season; we have heard reports of some of them asking leading fashion brands not to deliver too early, a shocking role-reversal mode.  Industry CEOs are hoping for the best but quietly making contingency plans.  Overall, the SLI has lost 4.9 percent over the month of November, compared to an increase of 1.8 percent in the MSCI general index.

• The long-rumoured acquisition of Italian tailor Brioni by PPR finally crystallised, evidencing the importance of the menswear segment for the sector’s growth expectations, especially in China.

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Dior Couture by Patrick Demarchelier | Source: Mama's Rolling Stone

Opening the Doors of Dior (NY Times)
“Saint Laurent, Chanel, Dior: the names of the most famous Paris houses sort of dance off the tongue. Their histories defeat the idea that younger generations might be bored with old things. And a stream of books and films helps to assure that they won’t be. “Dior Couture” (Rizzoli), by the photographer Patrick Demarchelier, is far and away the most gorgeous book on the house…What Mr. Demarchelier offers is a personal view of fashion from a great Paris house.”

Prada profit surges 75% in third quarter on Asia sales (BBC News)
“Profits at Italian fashion house Prada soared in the third quarter boosted by increased sales in the Asia-Pacific region. Prada said it made a net profit of 273m euros ($364m; £234m) in the three months to the end of October, a 75% jump from year earlier.”

Tiffany sales growth shows signs of slowing (Reuters)
“Concerns about slowing sales momentum took some of the luster off Tiffany & Co’s stock amid signs that European and U.S. economic distress are weighing on luxury consumers, and shares fell 9 percent. The upscale jeweler, a stock market darling for how fast its international business has grown, reported third-quarter.”

Hall of Fame: Patricia Field (WWD)
“Patricia Field has always done things her way. With a career spanning 45 years and counting, the designer, stylist and boutique owner built her reputation by creating her own blueprint. ‘If you asked me who I looked up to from the beginning of my career, I would say no one,’ Field said. ‘I didn’t see fashion that way. I felt fashion.’”

Rise: Sean McGirr (Dazed Digital)
“It’s no coincidence that Candy Nippon in Tokyo and Immense in Taipei – two of Japan’s most closely watched boutiques – have Sean McGirr’s A/W 2011 collection hanging from the clothes hangers. Titled ‘The Adolescent Years’, it draws from the Oriental kimono silhouette and shares a sensibility with Japanese fashion that gives it an uncanny autonomy.”

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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