London Fashion Week: Luxury fashion brands outshine their high street counterparts on the stock market
- LVMH and Hermès shares have done well over the past five years, data shows
- Retail companies such as Zara’s Inditex have seen lower growth, findings add
London Fashion Week kicks off this Friday and runs until Tuesday, September 19, but which top brands are best placed to keep your investment portfolio looking stylish?
Analysis from trading platform eToro shows that luxury fashion stocks have generated more than quadruple the returns of their high street counterparts over the past five years.
According to the data, the top 10 luxury fashion companies, including LVMH and Hermès, have recorded a 90 per cent growth rate over the past five years, compared to 23 per cent among their high street counterparts.
The figures cover the ten largest British and European fashion and luxury retailers by market capitalisation, and demonstrate a degree of resilience in elements of the luxury market during the cost of living crisis.
Growth: LVMH shares have done well over the past five years, eToro data suggests
According to eToro, luxury brands outperformed the European Stoxx600 by four to one in five years.
However, some major brands have regained ground in the past year amid lower inflation and higher wages, the findings suggest.
Both luxury and high street retailers in the UK and Europe have outperformed the broader European stock market since 2018.
LVMH has seen its market value increase by 163 percent over the past five years, while Hermès enjoyed a growth rate of 241 percent over the period.
Since the beginning of 2023, Hugo Boss and Prada have seen growth of 30 percent and 21 percent respectively, while many well-known high street brands have recorded more modest growth.
Spain’s Inditex, Zara’s parent company, is up 21 percent over the past five years, behind Sweden’s H&M, which saw a 26 percent rise.
UK based Next actions have increased by 25 percent in the last five years and JD Sports Stock has enjoyed growth of around 47 per cent during the period.
Asos was, according to eToro, the worst performer, experiencing a significant slowdown with a 94 percent decline in its share market value.
Asos reported revenue totaling £858.9 million in the third quarter of its fiscal year, down 14 percent from a year ago. So far this year, asos shares have fallen around 25 percent, according to eToro figures.
Brands: Top 10 brands by market capitalization, according to eToro
Uphill fight: Asos shares have struggled in recent years
Data: Evolution of luxury and High Street compared to the Stoxx 600
Ben Laidler, global markets strategist at eToro, said: “Big brands deserve credit for navigating this difficult economic environment well, and their collective share prices outperform the European share average.”
He added: “However, the fall in the share price of Asos, for example, is a stark reminder of how unforgiving and competitive the industry can be.”
‘This underlines the importance of adaptability and innovation in the ever-changing fashion industry.
“As the sector continues to evolve, we can expect to see further changes in the fortunes of these mainstream brands.”
Keep in mind that when selecting stocks, while it is essential to look beyond past returns, they will not guarantee any future growth.
