When asked why Harrods would continue to perform well despite the economic downturn, the luxury department store’s managing director Michael Ward offered a simple answer: “The rich get richer in a recession.”
His confidence is emblematic of the seemingly unstoppable growth seen in the premium retail market of late. Analysts at Bain & Company and Altagamma predict that 2023 will be another strong year for the luxury sector, with its €353bn (£286bn) of retail sales in 2022 expected to grow again by between 3% and 8% this year. Brands such as Richemont, Hermès and Moncler are likely to continue to lead the way, having seen in excess of 20% growth in their share prices over the past 12 months.
Topping the list of success stories is LVMH, owner of fashion houses Louis Vuitton and Christian Dior and champagne producer Moët & Chandon. In April, the French luxury group became the first European company to reach a market valuation of $500bn, cementing its CEO Bernard Arnault’s status as one of the richest people in the world.