Deloitte Global report finds the Top 10 luxury goods companies contributed more than half of Top 100 companies

• US$281 billion in revenues generated by Top 100 luxury goods companies 
• Sustainability will play a key role as fashion and luxury goods companies look for recovery after the pandemic crisis

SINGAPORE, 24 November 2020 - The world’s Top 100 luxury goods companies generated aggregated revenues of US$281 billion in fiscal year 2019, representing composite growth of 8.5%, according to the 2020 edition of Global Powers of Luxury Goods, a new report from Deloitte Global.

“The pandemic is proving to be an accelerator for brands to adopt new paradigms of value creation,” says Patrizia Arienti, Deloitte EMEA Fashion & Luxury Leader. “Now more than ever, luxury goods companies are leveraging digital technologies to augment the existing retail experience for their customers.”

Luxury goods companies have been investing significantly in “green” technologies and other measures such as carbon offsetting to fight against climate change. While this is not limited to innovations in the supply chain, embracing new values and perspectives in response to the evolving needs of consumers and the environment can act as a game changer.

Luxury resale and the circular economy
Although some luxury houses continue to express doubts about the resale market, there is little doubt that it is here to stay. Contrary to the belief that it will cannibalise demand in the primary market, growth in the resale market is in fact helping to increase it: many affluent millennials and Generation Z consumers are purchasing in both the primary and secondhand markets.

“Across Southeast Asia, we are witnessing the emergence of several luxury resale and rental platforms in what could be quite promising signs for a circular economy,” says Pua Wee Meng, Deloitte Southeast Asia’s Consumer Industry Leader. “The very defining characteristic of luxury goods as long-lasting, status items makes them attractive to secondhand buyers, and resale values are often boosted by artificially engineered scarcity, such as limited edition releases or high-profile collaborations.”

“Rather than perceive secondhand markets as substitutes to their primary markets, luxury goods companies could benefit from considering them as complements, and expanding their concept of a product lifecycle beyond the first sale. For example, a secondhand luxury good could serve as an entryway to the primary market for a new consumer, and consumers who sell their products in the secondhand market may perhaps become more likely to purchase another new item.”

Global Powers of Luxury Goods Top 100
The world’s Top 100 luxury goods companies generated revenues of US$281 billion in FY2019, up from US$247 billion in the previous year (an increase of US$34 billion). Annual growth jumped to 8.5% on a currency-adjusted composite basis, lower than previous year’s 10.8%. There were 12 “high performer” companies in the Top 100 that reported both double-digit year-on-year sales growth and a double-digit net profit margin.

The minimum revenue threshold required to enter the world’s Top 100 list of luxury goods companies in FY2019 was US$238 million, up by US$20 million from FY2018, with an average company size of US$2.8 billion.

For the first time in FY2019, the Top 10 luxury companies contributed more than half (51.2%) of the total luxury goods sales of Top 100 companies. Growth of the Top 10 outpaced that for the Top 100 companies, at 11.9% and 8.5% respectively.

Top 100 luxury goods companies based in China, Japan, and the US saw their composite year-on-year rate of sales growth drop sharply in FY2019 while companies based in Europe saw an increase in their growth rate, with the exception of the UK, which saw a subtle fall.

While Italy has the greatest number of luxury goods companies (22), France contributed the largest share (28.3%) to the total sales of Top 100 luxury good companies.

Multiple luxury goods was the top-performing sector in FY2019 with 12.8% sales growth and contributed more than one-third of the total Top 100 luxury goods sales.

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 FY2019 (for fiscal years ending through 31 December 2019)*, using publicly available data, and evaluates their performance across geographies and product sectors. It also discusses the key trends shaping the luxury market.

* Since the first Global Powers of Luxury Goods report was produced in 2014, a mid-year fiscal year has been used, i.e. for the Global Powers of Luxury Goods 2019 report, FY2017 meant fiscal year end dates from 1 July 2017 to 30 June 2018. For the Global Powers of Luxury Goods 2020 report, we have changed to a calendar year fiscal year definition, i.e. FY2019 means fiscal year end dates from 1 January to 31 December 2019. Growth calculations (CAGR and year-on-year) are also based on calendar year data for financial years FY2016 to FY2019.

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