luxury goods

Perspectives

Global Powers of Luxury Goods 2023

Game changing steps in luxury

Luxury goods company sales soar, profitability higher than pre-pandemic levels. During FY2022 the Top 100 luxury goods companies generated composite sales of US$347 billion, up from the US$305 billion registered in FY2021. This sharp increase in luxury goods sales signals the good state of the luxury industry after the pandemic years. The importance of the biggest luxury goods companies is clear: the 17 companies with luxury goods sales of more than US$5 billion contributed nearly 70% of the total Top 100 luxury goods sales. The 43 companies with sales of US$1 billion or less contributed only 6.4%. The minimum revenue threshold to enter the Top 100 was US$284 million.

The composite performance of the Top 100 companies in FY2022 reflects the continuing recovery from the impact of the COVID-19 pandemic, with stores open most of the year in most countries, travel and tourism returning, and consumer demand recovering especially in sectors such as makeup (see the separate box on the Impact of COVID-19 pandemic and company financial year end dates on FY2022 Top 100 ranking). For the 80 Top 100 companies reporting net profits in FY2022, the composite net profit margin was 1.2 percentage points higher than last year, at 13.4%, and higher than pre-pandemic levels.

In addition to exploring the trends reshaping the luxury goods market, this report delves into the 100 largest luxury goods companies, assessing their performance across geographies and product sectors. This year's report spotlights the industry's embrace of AI and the circular economy as game-changing forces. The luxury sector's ongoing transformation promises to redefine the industry, enhance customer experiences, and promote sustainability. As technology and luxury converge, the possibilities seem limitless.

The luxury industry embraces Artificial Intelligence (AI)

Luxury brands have traditionally represented the pinnacle of craftsmanship and exclusivity. However, in recent years, the industry has been at the forefront of embracing technology and digitalization, exploring new frontiers. AI, in particular, is making its presence felt in the luxury sector. Luxury brands are leveraging AI to provide personalized product recommendations, styling advice, and real-time customer support through GenAI-powered chatbots and virtual shopping assistants. This technological transformation aims to create a more unique and enjoyable shopping experience.

There is a transformation towards an expanded concept of luxury. We see an upward trend in offers in the area of experience and self-care - for example exclusive cruises and hotels, but also wellness and beauty clinics.

Karine Szegedi

Towards a circular economy

The luxury industry is also advancing toward a circular economy model, a trend supported by AI and technology. Digital Product Passports (DPP) and Digital IDs are being deployed to document a product's sustainability and circularity throughout its entire lifecycle, from design to end of life. The benefits of these initiatives are manifold, including increased consumer trust, improved brand sentiment, reduced risk of greenwashing, comprehensive product tracking, a decrease in the number of goods in circulation, and the exploration of potential new business models.

Switzerland – the land of watches and jewellery

For the third year in a row, all of the Swiss companies appearing in the 2023 Top 100 ranking are jewellery and watch companies, with Richemont and Rolex again landing in the Top 10. In FY2022, nine companies headquartered in Switzerland recorded a combined sales growth of 26.8% year-on-year, displaying clear growth compared to FY2021. Furthermore, for the second year in a row Switzerland sits at second place in the jewellery and watch sector with a stable 27% market share thanks to its strength in the Swiss watch industry.

    The top performing Swiss brand Richemont again achieved two-thirds of its luxury goods sales from their Maisons jewellery business and the highest FY2022 luxury good sales figures in the jewellery and watch sector with 50.1%. In addition to Richemont and Rolex, five privately owned global luxury watch brands (Patek Phillipe, Audemars Piguet, Richard Mille, Chopard, and Breitling), as well as Swatch Group and Swarovski Crystal (absent from last year’s report due to missing data) are featured in the Top 100. Audermars Piguet and Rolex joined ever-present Richard Mille among the 20 fastest growing companies which is based on the compound annual growth rate (CAGR) in luxury goods sales over a three-year period.

    Luxury goods are increasingly being ordered online. Especially in Switzerland, people are reluctant to go to luxury stores. This boosts online sales even more.

    Karine Szegedi

    Key findings from the report

    • The dominance of the top 10 luxury goods companies was slightly reduced in 2022 as their share of the total Top 100 luxury goods sales fell to 38.4%, from the high of 56.2% in the previous year.
    • In FY2022, the minimum revenue threshold to enter the list of Top 100 luxury companies was US$284 million, up from US$240 million of the previous year.
    • The composite luxury goods sales CAGR for the Fastest 20 companies were 18.3% between FY2019 and FY2022, more than double the Top 100's overall composite CAGR.
    • The clothing and footwear sector contributes the most companies to the Top 100 (37). However, 5 of the 6 new entrants this year were jewelry and watches companies, with the highest-ranking new entrant at 19th place in Top 100. Of these, 4 companies came from India and China. The 10 companies from China and the 6 from India are all vertically integrated jewelry retailers, also reflecting the importance of these countries as global leaders in gold and jewelry consumption.
    • Italy continues to be the leading geography with 23 luxury goods companies (32.4% of Top 100), but they only accounted for 7.8% of luxury goods sales. In comparison, 7 French companies accounted for nearly one-third of the Top 100 luxury goods sales in In FY2022.
    • 91 of the Top 100 companies reported growth in luxury goods sales in FY2022, compared to 72 in FY2021 and only 23 in FY2020, with 77 companies reporting double-digit sales growth. For the 80 Top 100 companies reporting net profits in FY2022, the composite net profit margin was 1.2 percentage points higher than last year, at 13.4%, and higher than pre-pandemic levels.
    • After 2021’s surge, in 2022 the of mergers and acquisitions activity in the personal luxury goods Top 100 slowed slightly in 2022 and the first eight months of 2023. Deloitte's Global Fashion & Luxury Investment and Private Equity Survey 2023 reported that there were 30 fewer deals in 2022 compared to 2021. Cosmetics and fragrances were identified as the most attractive sector for investors in 2023, followed by apparel and accessories.

    Global Powers of Luxury Goods Top 100, FY2022

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