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Headline Verdana BoldGlobal Powers of Luxury Goods 2017The new luxury consumer

Highlights presentation

Global economic outlook

© 2017. For more information, contact Deloitte Touche Tohmatsu Limited. 3

Global economic outlook

United States Slowdown in growth in 2016 Stronger Dollar and slowdown in trade from Chinese tourism

Risk of protectionist measures

Europe Slow, but steady, market growth Domestic shoppers cautious about spending

Tourists concerned about safety after terrorist attacks

Latin America Mexico is the largest luxury goods market, with a positive outlook

Brazil follows Mexico, with a good potential for growth

Middle East New growth potential Big opportunity for luxury goods brands

Russia Recent economic difficulties Luxury goods sales slowed Signs of stabilization for local currency in the future

Moderate growth expected

China & Hong Kong General economic uncertainty Weaknesses in the demand for luxury goods

Local price adjustment and related growth of domestic purchasing

Rest of Asia Strong growth in India Positive outlook for Japan Steady growth for South Korea

United Kingdom Sharp decline in pound value due to Brexit

Significant demand in UK luxury goods by Middle East, China, US an Russia

UK became the most affordable luxury market in the world

Global Powers of Luxury Goods 2017


Top 100 quick statistics


The top four companies retained their leading positions

Top 10 luxury goods companies

Compagnie Financière Richemont SA - Switzerland

The Estée Lauder Companies Inc. - US

Luxottica Group SpA – Italy

Kering SA - France

The Swatch Group Ltd. - Switzerland

L'Oréal Luxe - France

LVMH Moët Hennessy-Louis Vuitton SE - France

Ralph Lauren Corporation - US

Chow Tai Fook Jewellery Group Limited - Hong Kong

PVH Corp. - US

$ 22.4

$ 12.2

$ 11.3

$ 9.8

$ 8.7

$ 8.5

$ 8.0

$ 7.4

$ 7.3

$ 6.3

FY2015 sales (US$ billions) Change in rank

+1

-1

+1

+1

-2

%

Sales growth %

11.2

20.1

10.0

9.1

6.2

13.2

15.2

5.3

5.3

7.1

%

#1

#2

#3

#5

#4

#6

#7

#8

#9

#10

Key highlights

• Top 10 luxury goods companies

aggregate sales 48% of the total Top 100

• No new entrants to the Top 10 list in 2015

• Chow Tai Fook dropped two places in the

rankings

• All Top 10 companies profitable

c

FY2015 Top 100 rank#

Top 10

Top 100

$ 102.0

15.2

6.4

4.5

15.5

16.4

-3.0

16.7

-2.8

-11.9

-2.3

9.6

6.8$ 212.0

11.4

9.7

Net profit margin %

%


Fastest 20

CAGR and YoY Growth for the Fastest 20 were almost 4 times the rate for the Top 100

FY2013-2015 CAGR % Top 100 ranking

#

FY2015 CAGR ranking#

Marcolin Group#1

Valentino Fashion Group SpA#2

Pandora A/S#3

Restoque Comércio e Confecções de Roupas S.A. #5

Gitanjali Gems Ltd. #4

Kate Spade & Company#6

Acne Studios Holding AB #7

SMCP SAS #8

Fastest 20

Moncler SpA#9

Furla SpA#10

43.1

37.8

36.3

30.6

29.1

28.1

27.6

26.5

23.1

22.9

22.2

22.3

22.1

19.9

19.3

19.1

18.4

17.3

16.5

13.7

13.6

5.2

64

43

24

30

74

41

99

51

46

72

20.1

44.1

40.2

43.1

55.2

10.3

23.7

32.8

26.8

27.2

24.0

95.1

10.7

19.6

7.8

17.7

21.7

15.2

17.6

17.5

11.9

6.8

FY 2013-2015 CAGR

FY15

Growth

Eastern Gold Jade Co., Ltd #11

Vicini SpA#12

Charles Tyrwhitt LLP #13

Ted Baker plc#15

Michael Kors Holdings Limited#14

Richard Mille SA#16

PC Jeweller Ltd.#17

Gianni Versace SpA#18

Top 100

Hermès International SCA#19

Kurt Geiger Limited#20

36

94

86

14

54

97

44

53

12

69

FY 2013-2015 CAGR

FY15

Growth


Eight countries accounted for 88% of Top 100 sales

Geographic analysis

No. ofcompanies

Share of Top 100 luxury goods sales

FY 15 luxurygoods sales growth

China/Hong Kong 7 8.9% -2,4%

France 10 23.9% 14,9%

Germany 6 2.3% 5,6%

Italy 26 16.0% 9,3%

Spain 4 1.3% 9,7%

Switzerland 10 14.4% 3,6%

United Kingdom 10 5.6% 2,4%

United States 15 21.3% -0,3%

Other countries 12 6.3% 16,5%

Key highlights

• All the countries of Top 100 registered a

growth, except China/Hong Kong and United

States

• France has the highest share of sales and

biggest growth rate in 2015

• Italy is the leading country in terms of

number of companies

• Germany new entry in the ranking

c


Product sector analysis

Apparel and footwear

Apparel and footwear sector had the largest number of companies in the Top 100

Multiple luxury goods

Jewellery and watches

c

Cosmetics and fragrances

Bags and accessories

Bags and accessories

% Share of sales

FY 15 luxury goods sales growth

TOP 100

41

10

Companies by sector

10

28

11

Key highlights

• Slow growth for the apparel and footwear sector

• Highest rate among all the luxury goods sectors for bags and

accessories

• Cosmetics and fragrances companies are the largest on average among the

100

• The lowest luxury goods sales growth for jewellery and watches

• Multiple luxury goods achieved the highest profit margin

19.5 7.4 13.9 26.7 32.5

4.4 13.4 6.5 2.0 10.8

FY 15 sector sales growth

6.8

The new luxury consumer


Can we fit a vital section

of the global luxury

market inside Lisbon?


Can we fit a vital section of the global luxury market inside Lisbon?

Focusing on the half that actually

matters…

2 billion(Excluding males)

Starting withthe world…

7 billion(World’s

population)

But you need enough money…

3.3 million(Including Top 1% of

emerging market and 10% of mature market

earners)

Picking a decent luxury dozen…

4 billion(Focusing on a selection of

major luxury markets)

Excluding thosewho don’t…

1.2 billion(Excluding those under 18)

It’s not everyone’scup of tea …

2.5 million(Let’s say 1 in 4 might

not be interested)

Concentrating on the rising powers…

500 million(Millennials)


2.8million

And there you have it…

Some highlights from our research


Younger

consumers

Older

consumers

Total

Mature

markets

Emerging

markets

Where do luxury

consumers buy?

Home country

Abroad

Airport

The travel imperative intensifies

Key highlights

• Almost half of luxury purchases are made by

consumers who are travelling

• The propensity to buy luxury products in the

tourist marketplace declines with age

• Greater affordability and product availability

are the two main drivers of luxury purchases

abroad

c


The battle for price heats up

$350

$400

$450

$500

$550

$600

$650

$700

11-11月-16 11-12月-16 10-1月-17 09-2月-17 11-3月-17 10-4月-17

Weekly

media

n p

rice o

f lu

xury

goods

(USD

-adju

ste

d)

China Japan South Korea Hong Kong Russia

USA UK Italy FranceKey highlights

• US dollar-adjusted prices for equivalent items

are on average over 50% higher in China

than in Europe

• Price difference between China and Europe

varies by brand, from just 20% to over 70%

• The highest average premium is for watches

and jewellery (c.55%) and the lowest is for

bags (c.40%)

c

Source: BenchMarque by Deloitte. Covering 40 luxury

brands and over 100,000 luxury & fashion products.


The channel trends amplify

Younger

consumers

Older

consumers

Total

Mature

markets

Emerging

markets

Where do luxury

consumers shop?

Online

Mobile

Store

Key highlights

• A third of transactions are taking place in the

digital channel

• Young luxury shoppers say that c.40% of

their luxury purchases take place digitally –

almost half of which are via smartphone

• Digital transactions are more common in

emerging markets than mature markets

c


Followers of fashion … make America great again?

40% 50% 60% 70% 80% 90% 100%30%

97%

97%

68%

66%

68%

64%

63%

57%

54%

40%

38%

“When it comes to buying luxury products, for me

it’s important to buy the latest trend”

“I buy local luxury brands to

support the local economy”

40% 50% 60% 70% 80% 90% 100%30%

88%

77%

63%

28%

60%

66%

47%

57%

45%

38%

62%


Consumers view of the future … technology and price harmonisation

How do you see the luxury goods market evolving in your

country in the near future?

“By linking luxury products to technology”

“How do you see the luxury goods market evolving in

your country in the near future?

“By a decrease in the prices of luxury products”

25% 30% 35% 40% 45% 50% 55%20%

34%

64%

34% 44%

38%32%

33%

29%

23%28%

15%

19%

60% 65%

40%

45%27%

33%

28%

31%

30%

21%40%

28%

22%

25% 30% 35% 40% 45% 50% 55%20%15%


Top influencers of the luxury world


Contacts

Patrizia Arienti

EMEA Fashion & Luxury Leader

[email protected]

Nick Pope

UK Fashion & Luxury Leader

[email protected]

Tianbing Zhang

China Consumer Products and Retail Leader

[email protected]

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This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

© 2017. For information, contact Deloitte Touche Tohmatsu Limited

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