The price of a certain tranquillity

Cristina D’Agostino

By Cristina D’Agostino27 septembre 2022

Luxury stocks should continue to appeal to investors, while Russian President Vladimir Putin's announcements on his intentions in Ukraine are of the utmost concern. Ready to pay the price of a certain form of tranquillity during these difficult phases, they have no taste for risk-taking at the moment. In fact, luxury will once again demonstrate its resilience. And on this point, Swiss watch exports in August this year even confirm this principle, since they showed an increase of +14.7% compared to August 2021, to 1.7 billion francs. "The United States (+23.2%), China (+15.4%) and Japan (+48.3%) recorded particularly strong growth and between them accounted for more than half of the increase at world level", reported the Watch Federation on Tuesday. Subsequently, on the Swiss stock exchange, the shares of the two luxury groups that own watch brands jumped. Swatch Group shares climbed by 3% to 233.40 Swiss francs and Richemont by 2% to 103.50 Swiss francs, clearly outperforming the main SLI index (+0.19%).

Will this high price of tranquillity also be felt in the retail market? If a new repercussion of gas and raw material price increases on luxury goods will undoubtedly be effective again in the spring of 2023 when the new collections are presented (after a price increase already announced this summer on end products), brands will have to play on the subtle balance of the quality-price ratio to make this increase acceptable to the end consumer

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