November 22, 2024
Which French Stocks to Choose for a Bet on Luxury? #FrenchFinance

Which French Stocks to Choose for a Bet on Luxury? #FrenchFinance

CashNews.co

Hermès Monthly Chart – Source: ActivTrades’ Online Trading Platform

Bottom Line

The global luxury market, valued at approximately €320 billion in 2021, is on track to almost double, potentially reaching €600 billion by 2030, according to Luxonomy. This impressive projection underscores the resilience and adaptability of luxury brands in meeting global demand for premium goods.

Despite these promising forecasts, however, growth is expected to slow in the near term due to a tougher economic climate. McKinsey estimates that global luxury sales will grow by just 3–5% in 2024, down from 5–7% in 2023, as consumers dial back their spending following the post-pandemic surge.

The impact of this slowdown will likely vary across regions, with growth in Europe and China set to decelerate. Meanwhile, the U.S. market may rebound after a sluggish 2023, potentially adding some stability to global luxury sales. Yet, luxury brands that can adapt to shifting consumer dynamics and regional trends are positioned to remain attractive investments over the long term.

For investors, focusing on companies that blend tradition with innovation could be key. Brands adopting sustainable and ethical practices will be better aligned with the expectations of increasingly eco-conscious consumers. In this vein, companies like Hermès, which prioritise quality craftsmanship and exclusive, high-value products, may continue to outperform in challenging conditions.

Technology will also play a pivotal role in driving growth, with digital tools such as artificial intelligence, metaverse, and mixed reality promising to transform customer experiences, enhance personalization, and streamline operations. These advancements are likely to strengthen customer loyalty and reinforce the exclusivity that defines the luxury sector.

Ultimately, while the luxury sector remains a compelling long-term investment, success will depend on a brand’s agility in responding to both consumer demands and economic pressures. As investors evaluate the French luxury giants, factors such as market adaptability, sustainability initiatives, and strategic use of technology will be crucial in determining which brands are best positioned to navigate the challenges and opportunities ahead.

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