Tugba Sabanoglu
Research lead covering Non-food CG & Retail
Fashion and luxury companies in the stock market - statistics & facts
The U.S. markets are dominated by the impressive growth of major technology stocks. Together, Apple, Microsoft, and Nvidia account for approximately 35 percent of the total value of the Nasdaq exchange, and naturally drawing focus from retail investors due to their strong performance. Yet consumer companies, be it staples such as Walmart or discretionary categories have also played a significant role in market returns, shown significant resilience, and given investors reasons to be on the lookout for them as potential growth champions. In the consumer category, fashion and luxury stocks in particular have enjoyed a sustained period of growth following the recovery from the economic downturn that followed the pandemic. While fashion and luxury stocks may have lost their shine since the start of 2024, they still remain relevant as the demand and supply dynamics of the retail industry continue shifting trends and consumer behavior.
The highs of 2023 did not carry over to 2024 though. As of the end of 2023, the market cap of LVMH dropped by 100 billion U.S. dollars since the 2023 peak. Most recently in early September, the British luxury heritage brand Burberry exited the London Stock exchange after its share price tumbled for 14 months straight. The company’s net profit saw a sharp decline from 2023 to 2024, prompting the appointment of a new CEO in hopes of a turnaround.
For these companies, stock market recovery is highly dependent not only on the performance expectations of the fashion and luxury market but also on the overall state of the financial markets. In 2024, for instance, the Nasdaq 100 index's annual return rate was only about seven percent, signaling to the consumers that broader market challenges could influence recovery prospects for fashion and luxury stocks.
Market cap of fashion and luxury companies
Arguably the most high-profile stock market event for the fashion and luxury goods industry was when the French conglomerate LVMH hit 500 billion U.S. in market capitalization with its with stock price per share reaching a record high in April 2023. This move made the luxury group the most valuable European company every, overtaking incumbents in many other sectors. Behind LVMH’s stellar stock market success was company’s soaring sales that followed months of pandemic restrictions on travel and retail. That year, LVMH Group’s total revenue reached over 86 billion euros. The upward trend in LVMH’s sales reflected the renewed confidence in the personal luxury goods sector, which saw a jump of four percent between 2022 and 2023.The highs of 2023 did not carry over to 2024 though. As of the end of 2023, the market cap of LVMH dropped by 100 billion U.S. dollars since the 2023 peak. Most recently in early September, the British luxury heritage brand Burberry exited the London Stock exchange after its share price tumbled for 14 months straight. The company’s net profit saw a sharp decline from 2023 to 2024, prompting the appointment of a new CEO in hopes of a turnaround.
The cases of Lululemon and NIKE
Among the companies that enjoyed a stellar stock market run was the lifestyle and activewear brand Lululemon Athletica. The Canadian retailer experienced continuous stock growth from 2021 until late 2023, after which its share price tumbled by over 40 percent. As of September 2024, the company's market capitalization stands at approximately 35 billion U.S. dollars. In the year to date, the company returned a loss of about 45 percent in its market capitalization value. Another underwhelming performance has been that of Nike’s. Despite being one of the key players in the sports and athleticwear sector, Nike’s stock market presence in the New York Stock Exchange has not given investors reasons to be cheerful. The company’s stock has returned negative returns since the start of the year. Most recently, the company reported two consecutive quarters of declining sales revenue.For these companies, stock market recovery is highly dependent not only on the performance expectations of the fashion and luxury market but also on the overall state of the financial markets. In 2024, for instance, the Nasdaq 100 index's annual return rate was only about seven percent, signaling to the consumers that broader market challenges could influence recovery prospects for fashion and luxury stocks.
