Investing in luxury stocks means investing in a rapidly growing sector. According to a report created by Bain & Company and Altagamma, the luxury sector has recorded strong growth in recent years, and it is estimated that by 2030 it could be worth over 570 billion, more than double compared to 2020.
Based on these estimates, the most significant luxury brands in which to invest have been identified. Here’s what they are.
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Ranking of the best luxury companies to invest in
In the last year the luxury sector has grown throughout the world, driven by sales in the USA and Europe, achieving particularly significant results. At the beginning of 2023, for example, Bernard Arnault, the number one of LVMH, the largest company operating in the luxury sector, climbed the rankings of the richest men in the world, becoming the second richest man in the world.
Arnault’s fortune largely depends on the value of LVMH shares of which he is the majority shareholder. LVMH is worth over $350 billion, ranking as the largest company in the sector.
Luxury companies by market capital:
- LVMH: 356.28 billion EUR
- Dior: 120.85 billion EUR
- Ferrari: 62.33 billion EUR
- Hermes: 201.53 billion EUR
- Daimler: 86.47 million EUR
- Kering: 49.12 billion EUR
- Pandora: 78.69 billion DKK
- Hugo Boss: 4.15 billion EUR
- Farfetch: 532.44 million USD
- Burberry: 6.05 billion GBP
Bernard Arnault, the king of luxury
Bernard Arnault is one of the ten richest men in the world and, as anticipated, he owes his fortune to the luxury sector. The French entrepreneur is in fact the majority shareholder of the two largest companies operating in the fashion and luxury sector. Namely LVMH and Christian Dior.
More precisely, the Arnault family owns 97% of Christian Dior, which in turn controls a 42% share of LVMH, furthermore, Arnault directly controls a 5% share of LVMH.
Arnauld’s assets are estimated at around $182 billion, a wealth that makes him the second richest man in the world according to data updated to November 2023.
LVMH Moët Hennessy Louis Vuitton SE is not only a French multinational conglomerate operating in the luxury sector, but is the largest company in the sector by market capital.
In recent years LVMH has recorded excellent stock market performance, managing to almost triple its market capital in the last five years. More precisely, in November 2019, LVMH’s market capital amounted to just over one hundred billion euros and its shares were traded at around 250 euros.
While in November 2023 its market capital is estimated at around 360 billion euros and its shares are trading at around €719, thus marking a 5-year growth of over 455%.
LVMH’s fortune largely depends on its highly diversified and rich portfolio of products which helps guarantee the company the possibility of continuing to grow and capitalize on new trends, while remaining competitive within a market such as that of luxury, constantly changing.
Overview of Dior
Christian Dior SA, commonly known as Dior, is the second largest company in the luxury sector, specializing in fashion items and perfumes. The company was founded in 1946 by the French designer Christian Dior and is now 97% controlled by the Arnault family. Dior is the world’s second largest manufacturer of luxury products and the owner of the largest shareholding in LVMH.
In recent years, Dior has recorded excellent stock market performances, managing to double the value of its shares between November 2019 and November 2023. More precisely, in November 2019, LVMH’s market capital amounted to just over 70 billion euros and its shares they were traded at around 300 euros.
While in November 2023 its market capital is estimated at around 126 billion euros and its shares are traded at around €700, thus marking a 5-year growth of over 366%.
Overview of Ferrari
Unlike the first two companies in the ranking, Ferrari does not operate in the fashion sector, nor is it a French company. It is an Italian company specialized in the production of luxury sports cars based in Maranello.
Ferrari was founded in 1939 by Enzo Ferrari and is today controlled by the Agnelli family and the Ferrari family. To be more precise, Ferrari’s shareholding is made up of 24% by Exor of the Agnelli family, and 10% by the Pietro Ferrari Trust, furthermore the special shares of Ferrari are controlled by 70% by Exor and 29% by the Pietro Trust Ferrari.
In recent years, Ferrari has recorded excellent stock market performances, managing to triple its value own shares which in November 2019 were worth around €100 while in November 2023 they are worth around €328. Ferrari’s market capital has also grown exponentially, reaching a value of over 65 billion euros, thus marking a 5-year growth of over 231%.
Hermes is a French company specialized in the production of luxury goods founded in 1837 by Thierry Hermes. The company mainly produces leather garments, ready-to-wear and accessories for men and women.
Over the last 5 years, Hermès shares have recorded exponential growth, increasing by over 295%, reaching a value of approximately €1,942 per share compared to just €500 per share in 2019. The market capital has also grown significantly significant, reaching approximately 200 billion euros.
Daimler AG is a German multinational operating in the automotive sector, specializing in the production of luxury cars, commercial vehicles and vans through its subsidiary Mercedes-Benz.
Over the last 5 years, Daimler shares have recorded a growth of 37%, going from around €40 per share in November 2019 to around €58 per share in November 2023. Market capital has also grown significantly, reaching around €62 billion EUR.
Other leading companies in the sector
From sixth to tenth position, in the ranking of the ten companies in the luxury sector with the highest market capitalisation, we find Kering, Pandora, Hugo Boss, Farferch and Burbery whose market value ranges from Kering’s 49 billion euros to around half billion from Farfetch.