With the new European catwalk season in the works (Madrid Fashion Week has already started and London Fashion Week has already started), French luxury brands are once again in the spotlight. And not only in the purely textile field, but also on the stock exchange. And its behavior on the trading floors this year does not continue the trend of recent years.
Indeed, companies like LVMH or Kering, which integrate companies like Gucci, Yves Saint Laurent or Balenciagaare positioned this year among the most bearish so far in 2024, losing 16% and 42% respectively, placing themselves as the most bearish companies in the EuroStoxx 50. Both are trading at the lowest levels of the year, as is the case with L’Oréal.
This behavior, which reflects the weakness of consumption in China, is striking given its behavior over the last five years. Luxury stocks, such as LVMH and Hermes, had comfortably beaten the fast fashion In previous years, and this year, mainstream fashion brands seem to be catching up with their luxury counterparts.
“This is a radical change,” they point out from eToro, from where they point out that “the recovery of mass consumer companies is driven by the fall in inflation, the easing of pressure on the cost of living and the good results of Next and Inditex.”
LVMH, which is in the lowest zone of the year, and Kering are positioned this year among the most bearish so far in 2024.
From the investment platform and trade multi-asset, in fact, they point out that over the last five years, luxury stocks have significantly outperformed major brands, generating more than four times the profitability when considering 10 of the largest British luxury and mass-market fashion brands and European origin by market capitalization.
What is more, theLuxury brands have also significantly outperformed the major global indices over the same period.generating twice the profitability of the Stoxx 600 and four times that of the FTSE 100.
However, this year the trend has begun to reverse and this is felt not only in the capitalization of these companies but also in the fate of their main shareholders. So it is, Among the 20 richest people in the world, there are only three who have not seen their wealth increase this year and two of them are closely linked to luxury.
Bernard Arnault and Françoise Betancourt MeyerLVMH and L’Oréal shareholders are the only major fortunes to reduce their assets this year with Carlos Slim and to lose $28.4 billion And 15,600 respectively. This dynamic contrasts with that of the rest of the great fortunes, which record on average increases of more than 20 billion dollars over the first 8 and a half months of 2024.
The difference is even more striking when comparing these capital losses to gains of more than 22 billion that Bloomberg experts attribute this year to Amancio Ortega. The founder and owner of Inditex is benefiting from the good performance of the textile company’s shares on the stock market, where they have revalued by 27% and are among the most optimistic on the Ibex 35, after reaching 50 euros per share for the first time last Friday. .in its history.
AI, on the opposite side
The situation is very different in fortunes more linked to the technology and artificial intelligence sector. This is the case, for example, of Jen-Hsun Huang “Jensen”, founder, president, CEO and member of the board of directors of Nvidia, who holds the majority of the company’s shares. His fortune has increased this year by more than $60 billion thanks to well done on the floor of the company dedicated to the manufacture of chips and semiconductors. And this year, Huang has seen at specific moments how his fortune has decreased by up to 10 billion dollars in just 24 hours.
Assets most tied to AI and technology represent the other side of the coin
Also on the list is Larry Ellison, one of the founders and largest shareholder of software consulting firm Oracle, who once again ranks among the top ten richest people on the planet after a meteoric rise. And this year, he managed to increase his wealth by $50 billiononly behind the growth in wealth of Mark Zuckerberg and the aforementioned Nvidia founder.
Furthermore, this behavior has been exacerbated in recent sessions after the publication of the quarterly accounts of the North American company, which exceeded analysts’ expectations and showed a growth of 18%, and after learning of its “strategic agreement” with Amazon through which Amazon Web Services (AWS) will be able to access its databases.
