LVMH, Hermès and Kering stocks have all reached record highs in the past two months, although the Covid-19 pandemic is still raging throughout large parts of the world, investors keep pushing luxury-goods stocks higher, undeterred by near-record valuations. As the vaccine brings hope that we’ll eventually return to some sense of normality, consumers are bound to refresh their wardrobes.
The company’s growth includes strong performance in direct-to-consumer, which increased by 94%. The third quarter set the tone for the ever-important holiday season. While we won’t get those results for a while , it seems fair to say that lululemon has enjoyed sustained consumer demand. Overall holiday retail sales grew 3%, and given lululemon’s position, it stands to reason that the company was likely one of the benefactors.
Yet fashion often reacts against prevailing conditions. Faith Popcorn, whose job it is to imagine the future for big consumer groups, says this could manifest in what she calls the “Roaring 2020s” — decorative clothing, high heels and lots of makeup could be a backlash against the leisurewear that characterized much of the year.
LVMH, the world’s largest luxury company, owns 75 well-known brands spread across five main business segments — fashion and leather goods, selective retailing, perfumes and cosmetics, wines and spirits, and watches and jewelry. Their most well-known brands include Louis Vuitton, Dior, Sephora, Bulgari, Moët & Chandon, and Hennessy. It’s also expected to close its takeover of Tiffany & Co. this year.