LONDON, United Kingdom — The Savigny Luxury Index ("SLI") gained 5.5 percent in August, outperforming the benchmark MSCI World Index ("MSCI") by over four percentage points.  Strong results by sector leaders confirmed continued growth in Asia and increased tourist spending in Europe, thanks in part to a weaker euro.

Big news

• Richemont, Hermès, Prada, Tod's, Michael Kors and Ferragamo all confirmed a healthy outlook for 2012, driven by growth in Asia but also stated that increased tourist spending in Europe has thus far shielded them from a downturn in this strategic market.  The latter five companies announced results ahead of expectations, notably Michael Kors which announced first quarter sales and profit growth of 71 percent and 185 percent respectively, whilst Richemont announced it expected profit growth of up to 40 percent in its first half (ended September 2012).
• Not all players were as optimistic though – both Ralph Lauren and Tiffany lowered their forecasts for the next quarter and financial year, respectively.  Ralph Lauren cited the progressive withdrawal from its distribution partnerships in China and limited brand recognition in that market, whilst Tiffany pointed to toughening trading conditions.

Going up

• Michael Kors' share price gained over 30 perecent this month, owing to yet another impressive set of results.  The stock has more than doubled in value since its IPO last December.
• Brunello Cucinelli gained 19 percent this month on the back of strong half-year results, with growth in all foreign markets and increased sales through the mono-brand stores channel.
• Coach recovered some of its lost ground this month following its disappointing fourth quarter sales announcement.  The stock is still trading at a 5 percent discount to the closing price before its fourth quarter sales announcement.

Going down

• Ports ended the month 20 percent lower owing to disappointing interim results, with a 24 percent decline in operating profit despite a turnover increase of almost 10 percent.

What to watch

• A cheaper euro has been the sector's saving grace this month.  Its outlook is likely to have a significant impact on this year's sales and profitability for the key players.

Sector Valuation

Pierre Mallevays is a contributing editor at The Business of Fashion and founder and managing partner of 

Savigny Partners, a corporate advisory firm focusing on the retail and luxury goods industry.