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Fashion and luxury remain among the most attractive sectors for investors and financial operators. Thanks to the recovery linked to the drop in the costs of raw materials, energy and the easing of the problems connected to procurement and logistics. Among the drivers are digitization and sustainability, two of the most strategically important issues for companies in the sector.
Digitization and sustainability drivers of the sector
The photograph comes from the eighth edition of Deloitte’s Global Fashion & Luxury Private Survey which analyzes trends and M&A operations in the luxury market based on market data and interviews with both industrial and financial top managers. «After the impact of the Covid-19 pandemic, the luxury sector has once again shown great resilience in the face of new challenges linked to an uncertain macroeconomic and geopolitical framework. However, the growth trend continues and the sector is confirmed as one of the most attractive for investors, also driven by the attenuation of some problems that have arisen in the last period such as inflation, cost of raw materials and difficulties relating to the supply chain”. , commented Elio Milantoni, partner of Deloitte.
Tightening the focus, within the luxury fashion sector, the sectors that showed the greatest growth in 2021 (evidence of the post-Covid recovery) are Hotels (33.6%), Furniture (27.1%) and Clothing (25. 8%). But under the investor’s lens there are issues such as sustainability (including second hand) and digitization: «They are now essential factors: ever greater attention is paid by consumers to the selection of products made in a responsible manner – comments Tommaso Nastasi, Ppartner by Deloitte -. At the same time, luxury companies are aware that, in order to always intercept customer segments among the new generations, it is necessary to keep pace with technological innovation and with the new languages that are being adopted. For this reason, an ever greater digital presence is expected from them».
M&A deals growing in 2022
2022 was a dynamic year for the world of luxury also on the M&A front: there was a further increase in the number of transactions (+8) which totaled 292 during the year. The growth is linked above all to operations in the hotel sector with an increase of 16 deals compared to the previous year and also to furnishings (+9 operations). The Personal Luxury Goods segment, despite a decrease of -30% compared to the previous year, nonetheless constitutes approximately 43.2% of all transactions. Investor expectations for the next 3 years confirm a positive sentiment in terms of growth for the luxury personal goods sectors, but also for hotels, restaurants and furniture. In particular, hard luxury (watches and jewellery) and hotels are the sectors that are expected to have the best performances.
At a geographical level, however, it is the Old Continent that has recorded the most significant increase in deals, 25 more than in 2021, while North America recorded a contraction (-12). Looking ahead, however, the best performances will be those of Asia and the Middle East, which already recorded an increase in deals in 2022.