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ÃœTI - Discover the first New Luxury ÃœTI Newsletter.

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August 15th 2023
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Outil \u.ti\ (French) : Finalised object, used by a living being in order to increase its natural efficiency in action.

Dear ÃœTI friends,

Discover the first New Luxury ÃœTI Newsletter.

In it, we present our bulletins on the New Luxury theme and its sub-themes, and we decipher the news of the sector.

New Luxury: redefining the boundaries of luxury in 2023

The luxury market is experiencing rapid expansion driven by powerful growth drivers, including the return of Chinese demand, the emergence of new markets (India, Africa), the rise in demand from Millennials and Gen Z, and the widening of the "ultra-rich club".

However, the concept of luxury varies according to generational contexts, and it is appropriate to define what we are talking about. What does not change over the years is that luxury meets emotional needs rather than physiological ones. These needs only become a priority when universal needs (thirst, hunger, security, social connection) are met.

The "New Luxury ÃœTI" theme focuses on market players in emotion and passion. This is through four sub-themes: everyday luxury, mobility, travel, and vitality. The AMC "New Luxury" certificate provides diversified exposure to companies that develop and operate strong brands representing a powerful lever of imagination, reverie, and enchantment for their consumers.

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Premium brands of leather goods, textiles, spirits, and fragrances that demonstrate ingenuity to stand out with unique experiences, whether through product quality, offer exclusivity, innovation, or customer service.

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Prestigious mobility players (automotive, navigation, private aviation). These players face two major challenges: the race to autonomous driving and the transition to sustainable energy.

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Having free time has become a priority as a distinctive status element for new generations. A trend fueled by new hybrid work forms and the development of "Bleisure" - business trips that extend into tourist stays - benefiting travel players.

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Our relationship with time has been invested by the vitality industry (sports, nutrition, medicine), which is experiencing strong growth, driven by the influence of Asian cultures on Western practices.



Portfolio Construction: This definition of luxury allows us to build a diversified portfolio, within which Growth and Value alternate, aiming to generate robust returns over time. Since the launch and following the earnings season that ended on August 8 for the theme, the "Travel & Lifestyle" and "Better Me" sub-themes have outperformed compared to traditional luxury players represented in the "Everyday Luxury" and "Refined Mobility" themes:

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News:

BOOKING HOLDINGS: Following the publication of its results, Booking's share price rose by 8%. The company's revenues grew by 27%, thus exceeding analysts' forecasts, who expected a slowdown due to inflation. Despite this context, the demand for travel remained resilient, with 15% growth in all travel services offered by the group.

INTERCONTINENTAL GROUP: the results for the first half were broadly in line with expectations, with a solid RevPAR (revenue per available room) dynamic in the second quarter and a strong margin expansion driven by the recovery of the EMEA region and China.

AIRBNB: For the semester that ended on June 30, revenue was $4,302 million, compared to $3,613 million a year ago. Net income was $767 million, compared to $360 million a year ago. Earnings per share were $1.21, compared to $0.57 a year ago.

ACCOR: During the past semester, Accor benefited from sustained activity across all its brands and regions, showing 39% YoY growth. Comparable data growth is +35%, including +34% for the Premium, Mid-range, and Economic segment, and +40% for the Luxury and Art of Living segment. Consolidated EBITDA more than doubled YoY.

LVMH released half-year figures in line with expectations. LVMH maintains its operating margin at 27.4%. The acceleration of perfumes and cosmetics in the second quarter and that of jewelry with the reopening of the legendary New York flagship Tyffany were remarkable.

ASTON MARTIN LAGONDA GLOBAL HOLDINGS: the luxury car manufacturer reduced its loss by over $100 million compared to the same quarterly period last year.

KERING acquires 30% of Valentino with an option to take over the entire brand within five years. The agreement could help Valentino address its struggle to align its commercial offer with its prestigious haute couture message. It also signals closer ties between Kering and Mayhoola, owner of Valentino, which, along with a recent executive reshuffle, might suggest a path to the eventual succession of Kering CEO François-Henri Pinault.

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Reporting 📈

In conclusion,

"When most needs are met, we seek satisfaction outside of necessity, in beauty, art, sport, in what is not directly useful, or what goes beyond mere utility, like fashion.

We also need meaning. Luxury Houses are deeply linked to culture, art, and craftsmanship. Cartier collections are tangible witnesses to the architectural and design currents of the 20th and 21st centuries. These collections are displayed in leading public museums that recognize this cultural value.

Luxury Houses also illustrate societal evolutions, the emergence of new powers, the growing role of women. They help us express who we are, define our identity, celebrate our successes, and the connections with our loved ones." Cyrille Vigneron, CEO of Cartier



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Thank you all for reading and for the growing number of you joining the collective.

ÃœTI Collective


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