A Gilded Age Is Fading for Luxury Brands
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,623,020 (+0.08%)       Melbourne $974,710 (-0.81%)       Brisbane $992,583 (-1.37%)       Adelaide $896,270 (+0.26%)       Perth $892,481 (+0.31%)       Hobart $726,595 (-0.35%)       Darwin $664,958 (+1.76%)       Canberra $1,012,150 (+0.04%)       National $1,048,965 (-0.14%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $751,258 (-0.23%)       Melbourne $495,378 (+0.24%)       Brisbane $583,696 (-1.32%)       Adelaide $453,443 (-0.76%)       Perth $458,999 (+2.21%)       Hobart $509,191 (+0.99%)       Darwin $362,436 (+1.68%)       Canberra $497,643 (+0.69%)       National $536,245 (+0.06%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 9,903 (-109)       Melbourne 14,181 (+71)       Brisbane 8,075 (-54)       Adelaide 2,184 (+36)       Perth 5,723 (+16)       Hobart 1,216 (+3)       Darwin 275 (+14)       Canberra 888 (+5)       National 42,445 (-18)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,719 (+28)       Melbourne 8,357 (+7)       Brisbane 1,747 (+49)       Adelaide 405 (+23)       Perth 1,442 (+5)       Hobart 211 (-1)       Darwin 399 (-7)       Canberra 1,018 (+16)       National 22,298 (+120)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $800 (-$20)       Melbourne $620 ($0)       Brisbane $635 (-$5)       Adelaide $610 (-$10)       Perth $675 (-$20)       Hobart $550 ($0)       Darwin $700 (-$30)       Canberra $680 ($0)       National $666 (-$12)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $595 ($0)       Brisbane $625 (-$5)       Adelaide $510 (+$10)       Perth $630 (+$5)       Hobart $470 (+$5)       Darwin $560 (+$30)       Canberra $550 ($0)       National $597 (+$4)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,884 (-132)       Melbourne 6,585 (+256)       Brisbane 4,488 (+137)       Adelaide 1,589 (+2)       Perth 2,880 (+283)       Hobart 411 (+13)       Darwin 93 (-4)       Canberra 632 (+17)       National 22,562 (+572)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,906 (+381)       Melbourne 6,312 (+294)       Brisbane 2,339 (+54)       Adelaide 371 (+21)       Perth 797 (+18)       Hobart 143 (+3)       Darwin 126 (+3)       Canberra 816 (+23)       National 21,810 (+797)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.56% (↓)     Melbourne 3.31% (↑)      Brisbane 3.33% (↑)        Adelaide 3.54% (↓)       Perth 3.93% (↓)     Hobart 3.94% (↑)        Darwin 5.47% (↓)       Canberra 3.49% (↓)       National 3.30% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.19% (↑)        Melbourne 6.25% (↓)     Brisbane 5.57% (↑)      Adelaide 5.85% (↑)        Perth 7.14% (↓)     Hobart 4.80% (↑)      Darwin 8.03% (↑)        Canberra 5.75% (↓)     National 5.79% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 29.8 (↑)        Melbourne 31.6 (↓)     Brisbane 30.4 (↑)        Adelaide 25.3 (↓)       Perth 35.7 (↓)     Hobart 33.0 (↑)      Darwin 43.9 (↑)      Canberra 31.9 (↑)      National 32.7 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 30.2 (↑)      Melbourne 31.7 (↑)        Brisbane 27.1 (↓)       Adelaide 25.5 (↓)     Perth 37.5 (↑)        Hobart 38.0 (↓)       Darwin 37.9 (↓)     Canberra 41.2 (↑)        National 33.6 (↓)           
Share Button

A Gilded Age Is Fading for Luxury Brands

The latest results from Louis Vuitton owner LVMH show that luxury shoppers are sobering up after years of heavy spending

By CAROL RYAN
Thu, Oct 12, 2023 8:12amGrey Clock 3 min

The end of easy money is catching up with luxury brands. It took a long time, so the skills needed to protect their profit margins may be a bit rusty.

Shares in the world’s biggest luxury company, LVMH Moët Hennessy Louis Vuitton, fell 6% Wednesday after it reported a slowdown in sales for the third quarter the previous evening. LVMH grew sales by 9% for the three months through September compared with a year ago. That sounds impressive, but the business was growing at almost double this pace in the second quarter.

Demand for luxury goods has slowed for most products and in all major regions. One surprise was a 14% drop in sales at LVMH’s wines and spirits divisions. Shipments of cognac brands such as Hennessy have been weak in the U.S. all year as cash from pandemic stimulus checks runs out, but the trend is getting worse.

The slowdown is no longer limited to “aspirational” shoppers, as the industry lingo frames less wealthy buyers. Sales of LVMH’s expensive watch and jewellery brands were weaker than analysts expected. And wealthy European consumers who were spending freely on luxury goods early this summer turned cautious in the third quarter.

Investors knew that a slowdown was coming, but not how big it would be. After Wednesday’s share-price drop, LVMH has lost a quarter of its market value in roughly six months. The slump may be more severe at weaker rivals like Burberry or Gucci owner Kering, whose stocks also fell Wednesday. Recently, the entire luxury industry has fallen out of fashion with shareholders, who at the start of the year expected a bigger surge in Chinese demand after the country lifted all pandemic restrictions.

With business probably as good as it can get in China, there is no obvious place the industry can turn to for new growth. Weaker demand for luxury goods will damp brands’ ability to raise prices. Last year, exceptionally strong sales helped them lift prices by 8% on average, according to UBS estimates. This pricing power has been a big draw for investors, and boosted profit margins, but it is probably over for now. In the four years leading up to the pandemic, prices rose only 1.2% annually on average.

Luxury companies face a balancing act with their multibillion-dollar advertising budgets and store-rollout plans. They may need to save cash to protect margins. At the same time, they must continue to spend on advertising to maintain their trademark desirability.

Some perspective is necessary, though: Today, LVMH’s fashion-and-leather-goods division, its main profit driver, is 80% larger than it was in the third quarter of 2019, before the pandemic. The industry has had an amazing run and is expected to grow in 2024. Still, some of the sheen that made it particularly attractive to investors in recent years has faded.

Last month, LVMH was even dethroned as Europe’s most valuable company by Novo Nordisk, the Danish pharmaceutical company behind weight-loss drug Ozempic. Leaner times ahead.



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Money
After Pandemic Slowdown, Global Wealth Is Growing Once Again, Led by the U.S.
By GEOFF NUDELMAN 14/07/2024
Money
The One-Child Policy Supercharged China’s Economic Miracle. Now It’s Paying the Price.
By LIYAN QI 13/07/2024
Money
Economist Shane Oliver’s advice for investors: follow these simple rules for optimum results
By Bronwyn Allen 12/07/2024
After Pandemic Slowdown, Global Wealth Is Growing Once Again, Led by the U.S.
By GEOFF NUDELMAN
Sun, Jul 14, 2024 2 min

The latest edition of an annual UBS wealth report notes that while “the global economy is in the midst of a dramatic structural upheaval,” wealth is growing once again after a downturn through the pandemic.

UBS analyzed income and wealth data from 56 markets, representing “92% of the world’s wealth,” in its Global Wealth Report 2024, released Wednesday. The report’s overarching theme found that global wealth grew by 4.2% in 2023, offsetting a loss of 3% in 2022. Even in the face of continued inflation, adjusted global wealth grew by 8.4%.

However, overall global wealth growth is down, from an annual average of 7% between 2000 and 2010 to just over 4.5% between 2010 and 2023, the report said. This equates to a reduction in global wealth of almost one-third.

The remaining growth seems to be continuing on pace in the world’s most developed and already prosperous nations. In the U.S., average wealth per adult grew by nearly 2.5% and the country accounts for 38%, roughly 22 million, of all millionaires worldwide.

Mainland China came in second with just over 6 million millionaires, followed by 3 million  in the U.K.

The report also took a look at the growing issue of wealth transfer. Over the next 25 years, US$83.5 trillion of global wealth will be transferred to spouses and the next generation. UBS estimates 10% of that will be transferred by women and US$9 trillion will shift between spouses.

Wealth in the Asia-Pacific region grew the most—nearly 177%—since the report began tracking data 15 years ago. The Americas come in second, at nearly 146% growth. Surprisingly, Turkey has enjoyed the most wealth growth per adult of any individual nation in the last 15 years—more than 1,700% in local currency.

The world’s wealthiest class continues to be a small, tightly concentrated group. According to the report, only 12 people hold between US$50 billion and US$100 billion and just 14 people hold US$2 trillion of the world’s wealth. The U.S. and Canada are home to individuals holding 44% of this wealth, while another 25% is held by people in Western Europe.

UBS data suggests that global wealth will continue to grow most in emerging markets, with some countries experiencing millionaire growth of up to 50% over the next five years.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Lifestyle
Americans Are All Over Europe This Summer. Here’s How to Outsmart the Crowds.
By ALLISON POHLE 25/06/2024
Property
Belle Epoque Estate Lists in France’s Fragrant Perfume Capital
By CHAVA GOURARIE 21/06/2024
Money
Monaco, Venezuela Placed on Global Money-Laundering Watch List
By MENGQI SUN 02/07/2024
0
    Your Cart
    Your cart is emptyReturn to Shop