Despite pandemic challenges, Deloitte Global report finds more than half of the Top 100 luxury goods companies were profitable in FY2020

The world’s Top 100 luxury goods companies generated aggregated revenues of US$252 billion in financial year 2020, representing a composite year-on-year decline of 12.2%, according to the 2021 edition of Global Powers of Luxury Goods, a new report from Deloitte Global.

There is growing awareness of environmental concerns and the need for sustainability in how goods are produced and used. “As luxury goods companies seek new ways to connect with their customers, they are changing their approach and mindset by incorporating sustainability and digitalization into their long-term strategies,” says Giovanni Faccioli, Deloitte North and South Europe Fashion & Luxury Leader. “They are focusing on the use of technology to develop environmentally friendly materials and find new ways to be more sustainable—in design, production, distribution, and communication.”

“During the pandemic companies pivoted to online solutions, with some offering e-commerce for the first time,” says Evan Sheehan, Deloitte Global Retail, Wholesale & Distribution Sector Leader. “It is now a vital part of the omnichannel distribution strategy for nearly all the global luxury brands.”

"Luxury e-commerce has passed its tipping point. This shift has been driven by multiple factors, including the rapid growth of e-commerce during the pandemic, younger consumers’ increasing purchasing power, and China’s rapidly growing share of global luxury sales," adds Tianbing Zhang, Deloitte APAC Consumer Product and Retail Sector Leader. "More and more luxury brands are collaborating with major luxury e-commerce players and social media platforms to deliver high quality, flexible, reliable, brand-centric e-commerce business models."

Global Powers of Luxury Goods Top 100

The world’s Top 100 luxury goods companies generated revenues of US$252 billion in FY2020, down from US$281 billion in the previous year (a decrease of US$29 billion). Over 80% of the companies in the Top 100 reported lower luxury goods sales in FY2020, reflecting the adverse impact of the COVID-19 pandemic, with sales down due to store closures, travel bans, shifts in consumer demand, supply chain disruptions, and other factors.

The minimum revenue threshold required to enter the world’s Top 100 list of luxury goods companies in FY2020 was US$182 million, down by US$56 million from FY2019, with an average company size of US$2.5 billion.

Despite a fall in luxury goods sales growth, the FY2020 composite net profit margin for the 81 Top 100 companies reporting net profits fell by only 5.7 percentage points, to 5.1%.

More than half of the Top 100 companies were profitable in FY2020 and all the total Top 100 companies’ FY2020 net profit came from the very resilient Top 10 global luxury companies.

While Italy has the highest number of luxury goods companies, including five new entrants in FY2020; France contributed 28.1%, the largest share to the Top 100 luxury goods sales.

The multiple luxury goods companies* contributed more than one-third of the total Top 100 luxury goods sales, although sales were down 12.7% year-on-year. Cosmetics and fragrances companies saw the smallest fall in luxury goods sales, down 9.6% year-on-year.

*Multiple luxury goods companies are those with substantial sales in more than one of the luxury goods product sectors.

About Global Powers of Luxury Goods

The report identifies the 100 largest luxury goods companies globally, based on the consolidated sales of luxury goods in FY2020 (for financial years ending within the 12 months from 1 January to 31 December 2020) using publicly available data, and evaluates their performance across geographies and product sectors. It also discusses the key trends shaping the luxury market.

To find out more, read our full report and the report highlights.