MILAN — Investors in luxury goods are going to have to get used to slimmer years ahead, for the buoyant days of China-propelled growth may be over for good.

This was one of the messages delivered during a presentation by Ernst & Young partners with expertise in luxury goods and fashion.

Going forward, “we have to get used to more contained — but more sustainable — growth,” Roberto Bonacina, partner, Ernst & Young Transaction Advisory Services for Fashion & Luxury, said, pointing out that it is not necessarily a bad thing for investors to know that they can count on lower but stable growth for several years as opposed to more roller coaster, boom-and-bust cycles.

While the current macroeconomic context makes it hard to forecast high growth returning again soon to luxury goods, Giovanni Vacchi, partner, said he could see a return to rapid expansion again, although not perhaps on the level luxury goods makers had been used to in recent years if, among other factors, Africa should ever “take off.”

For those looking for more precise guidance, according to slides distributed during the presentation, average annual growth for the biggest players in the luxury goods industry — some 23 listed companies including Kering, Luxottica, Michael Kors, Salvatore Ferragamo, Yoox Net-a-porter, Brunello Cucinelli and Jimmy Choo — is forecast to be about 6.6 percent a year during the 2015 to 2018 period. These estimates, the consultants said, are not by Ernst & Young but are a consensus of several broker reports for each company.

For those worried about China’s prospects as a market driving luxury goods sales, Bonacina stressed that the economy is still expanding annually by over 6 percent and that while the first target of buyers in China were the wealthy and that this market may be reaching saturation, there is still a broad and ever-increasing middle class whose thirst for fashion and luxury goods will create many opportunities.

Bonacina said that overall the industry will grow by about 1 percent this year, although luxury goods makers will see 6 percent to 7 percent growth. This implies that the lower end of the fashion pyramid is suffering most. Yet there are opportunities here, too, the expert said, pointing out that there is a theme of “brand positioning” in the industry: as many brands moved up, to catch higher spending and recession-proof consumers, the lower segment was left relatively uncovered.

Now this abandoned segment is being filled by fast-fashion chains — like Zara and its ilk — that are good on quality and are attracting consumers who are open to wearing an H&M outfit with their Chanel bag. Some higher-end brands are trying to catch part of this segment, with more entry-level offerings, for example. But, as Bonacina pointed out, as higher-end brands try to move back into this segment they previously abandoned, this will impact their sales growth and their profitability — especially as they continue to invest some 5 percent to 6 percent in capital expenditure annually, much of that on their online activities.

Another area hitting luxury brands’ profitability is the cost of the rapid retail expansion of previous years — especially in China — a process that is being in some instances reversed. But while many brands are selectively closing locations around the world, Bonacina said sales growth in retail channels is on average twice what it is through wholesale. So abandoning direct retail is, of course, not possible — nor is it desirable, for it remains the fulcrum of the customer experience.

However, Bonacina said that brands have to focus on getting a right “physical-online” balance and get consumers into brand “ecosystems” that include product quality, the retail experience — both in stores and online — communications and social media. In this setting, the reasoning goes, multibrand retailers — like department stores — may find increased favor going forward. For sure, retail spaces can be smaller, for many consumers enter stores already informed about what they want and have seen online and smaller spaces mean lower costs and less pressure on margins.

The Ernst & Young study also looked at high-end cosmetics brands and the seven that were included in the research — including L’Oréal, Shiseido and the Estée Lauder Cos. Inc. — had more “stable” performance compared to their luxury goods peers over the past five to six years, with average annual growth of 4 percent a year even as they are forecast to clock in an average 5.9 percent annual growth from 2015 to 2018 (so just a bit lower than their luxury goods counterparts). Unlike their luxury goods peers, Bonacina pointed out that the cosmetics companies didn’t suffer margin compression in the past years, with average earnings before interest, taxes, depreciation and amortization stable at around 18 percent of sales.

Online cosmetics sales growth — at 30 percent on 2015 — is comparable to the performance of that of personal luxury goods and accounted for about 6 percent of total beauty sales last year, again a figure comparable to that of overall luxury sales.

Two-thirds of sales growth in cosmetics has come from emerging economies, Bonacina said, pointing to India, South Africa and Turkey as key growth markets. He added that there are some countries — for example, where air pollution is a serious problem — where skin care and natural health products are particularly in demand. This is a segment that investors are eying with keen interest, the expert said.

Another insight shared in the research concerns accessories, which have been the fastest-growing category in luxury goods since 2009, with a compound annual growth rate of some 12 percent through 2015. Accessories account for some 30 percent of total personal luxury goods sales and some 40 percent of total online sales of personal luxury goods, Bonacina said, and this is a category that promises to continue outperforming. Shoes — both women’s and men’s — are the star category, continuing to outpace sales in leather goods.

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