Focus on Asia and the Middle East, on digital and sustainability, and offer tailor-made shopping experiences, both in communication and in retail. These are some of the data that emerged from Deloitte’s most recent “Global Fashion & Luxury Private Equity and Investors Survey 2022”, a report that analyzes trends and M&A transactions in the luxury market based on market data and interviews with top managers.
“In 2021 the sector recovered in the wake of the new strategies adopted by companies in the field of new technologies and the growing commitment to sustainability issues. In 2022, the luxury market should accelerate further with double-digit growth and reach pre-pandemic levels ”, says Elio Milantoni, Deloitte partner.
Experiential luxury still suffers
If in the five years preceding the pandemic, between 2015 and 2019, the growth of the luxury market had recorded a CAGR of + 3.4% (increased to + 6.5% if limited to the personal luxury goods segment) , Covid has stopped and reversed this trend, and in 2020 the value decreased by 10.5%, with some segments in considerable difficulty, such as the hotel sector (-53%) and cruises (-77.7%) , due to global lockdowns. The only sectors that recorded positive growth were furniture (+ 4.2%), driven by the interest in domestic spaces and smart working, and yachts (+ 3%), considered a valid alternative to housing. more traditional.
Considering the Ebitda margin of the sector, it fell to 15.9% (-1.5% compared to 2019), while the Personal Luxury Goods segment, despite having undergone a greater downsizing compared to the previous year (-2.8%), presents a higher margin (22.3%). Particularly penalized were, once again, the sectors related to tourism such as hotels and cruises which, in terms of margins, respectively lose -15.1% and -208.1%, and will continue to be the most affected also in 2022. from the negative effects of the pandemic.
Re-commerce, Asia and the United States in the foreground for investors
Investments in digital and sustainability are the most present in the intentions of managers, also with formulas that combine the two fronts such as the expansion of the re-commerce offer (pre-loved, re-selling and rental). As for the markets, we continue to look with interest to China, the main engine of recovery in the luxury goods market and which, according to estimates, will absorb 50% of sales by 2025. On the supply side, however, the main challenge remains to manage the increase in prices, mainly due to the increase in the costs of raw materials and labor. “From a geographical point of view, Asia and the United States they are driving the recovery of the market with Chinese consumers confirming themselves as the most active in 2022, thanks to a dynamic internal market », comments Tommaso Nastasi, partner of Deloitte.