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Compounding Heritage

@EQUITYMATES|17 October, 2023

This article take a look at the luxury market and tries to understand how we can approach these companies as investors. It unpacks the story of three well-known luxury goods makers – LVMH (Louis Vuitton Moet Hennessy), Hermes and Ferrari – and asks what has given them enduring staying power as luxury brands.

All three of these brands have incredible heritage, and that heritage is something that is hard to overcome and impossible to replicate. But that doesn’t mean their success is inevitable. The fashion world is filled with stories of luxury brands that couldn’t maintain their brand position. These companies must continue to straddle a tough line: be appealing to a modern audience while being true to their historic roots. It’s difficult, but when they do nail it, these luxury products are near timeless.

Global Personal Luxury Goods Market

Overall, the luxury market has grown quickly since the turn of the century. And it isn’t slowing down, Bain & Company estimate it will reach a value of between €540 billion and €580 billion by 2030.

As the market has grown, many investors have done well in this space. And that doesn’t appear likely to slow down. The challenge is picking the luxury brands that will be the most appealing to the next generation of consumers. But if we can do that, we might just earn enough investing in these companies to afford some of their products.


This is an excerpt from our Thought Starters email. Once a week we send you 5 interesting articles that have caught our attention, to get you thinking. No spam, we guarantee.

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