Luxury Headlines – 18/04/2023
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Chopard Pushes Sustainability in Manufacturing
Swiss luxury watchmaker Chopard will switch to mostly recycled steel in a push to become more sustainable through a process that represents a technological breakthrough. Steel manufacturing is a major contributor to global CO2 emissions. The goal is to manufacture the new steel alloy using 90% recycled material by 2025. Chopard currently produces between 45,000 to 50,000 steel watches per annum requiring 25 to 30 tonnes of steel, thus making this a significant reduction in carbon footprint. This innovation in sustainable manufacturing practices is part of a wider structural overhaul of Chopard and its business operations.
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LVMH Reports 17% Growth in 2023 First Quarter
LVMH reported a 17% rise in sales to €21.04 billion, more than double analysts’ expectations (which stood at 8%). Sales in Q1 grew by 14% in Asia (excluding Japan) compared to an 8% decline in 2022 fourth quarter. Europe experienced good organic growth at 24%, while Japan experienced strong momentum at 34% organic growth. The group is expecting China to drive growth in 2023. While business is slowing down in the US, the overall sales growth was still at 8% due to brisk business at its Sephora beauty stores.
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Tiffany & Co. Bolsters Manufacturing Capacity
LVMH has purchased a majority stake in Platinum Invest Group, a French jewelry manufacturing group. This will allow improvement in Tiffany & Co.’s fine and high jewelry manufacturing capacity and capabilities. Tiffany is having a strong start to 2023 reporting an 11% year over year growth .
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Hermès Shows Resilience With 23% Sales Growth in 2023 First Quarter.
Hermès once again showed resilience with 23% revenue growth in the first business quarter, owing to robust sales and a dynamic performance in China, US and Europe despite global economic turmoil. In the US, sales rose by 19%, while China performed even better with 23% sales growth. This resilience is attributable to higher exposure to wealthier customers, significant investment in the US market and a very dynamic market in Asia. First quarter revenues rose to $3.74 billion for the first quarter, beating consensus estimates. Revenues from Chinese tourists to Europe are expected to resume towards the end of the year, while an uptick in business from travel to Hong Kong and Macau, Singapore, and Australia is already evident.
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China's Hainan Island Hosts China Expo 2023
This week Hainan, the so-called “Hawaii of China”, hosted 300,000 visitors showcasing 3000 brands including Burberry, Estée Lauder, LVMH, Bentley, Porsche, Ferrari and Shiseido and others. This is part of the island's strategy to position itself for a rebound in local travel and duty-free consumption now that Covid restrictions have been lifted. Hainan has already experienced very robust growth during the first quarter. The government plans to make the entire island duty-free by 2025, effectively creating price reductions of up to 40%.
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