Economic Recession is a 'Story from Another World'... Super Rich Unfazed, Loving Luxury Bags and Supercars

Louis Vuitton, Versace and Other Luxury Brand-Holding Companies See Revenue Increase
Ferrari Records Highest Ever Q2 Revenue

Luxury brand companies' sales are increasing.
[Image source=Yonhap News]

[Asia Economy Intern Reporter Kim Gun-chan] Despite concerns about an economic recession due to inflation, sales of luxury brands have rather surged. It is analyzed that the consumption of the 'super-rich' who want to purchase luxury goods and supercars continues.

According to recent reports by the U.S. economic media CNBC, companies owning luxury brands such as Ferrari, Louis Vuitton, and Versace have recorded solid performance and are raising their future profit forecasts.

According to the report, French company Louis Vuitton Moet Hennessy (LVMH) recorded sales of 36.7 billion euros (about 49 trillion won) in the first half of this year. This is a 21% increase compared to the same period last year (28.7 billion euros). LVMH is the world's top luxury sales company owning brands such as Louis Vuitton, Christian Dior, Celine, and jewelry brands Tiffany & Co., Bulgari, among others.

Capri, the company owning Versace and Jimmy Choo, also recorded second-quarter sales of 1.36 billion dollars (about 1.76 trillion won), up 15% from the previous year. John Idol, CEO of Capri Holdings, stated, "The resilience of the luxury industry has been proven," and added, "We are confident in achieving long-term performance forecasts this time as well."

Ferrari SF90 Stradale.
Photo by Reuters Yonhap News

Italian supercar brand Ferrari also recorded a record high sales of 1.29 billion euros (1.7 trillion won) in the second quarter and raised its performance outlook for this year. According to the automotive media 'Car and Driver,' sales of hybrid models such as the Ferrari '296 GTB,' starting at $322,000 (about 420 million won), and the '812 GTS,' priced at a minimum of $600,000, showed strong performance.

Experts analyze that the slowdown in luxury industry consumption tends to appear the slowest.

Milton Pedraza, CEO of Luxury Institute, a U.S. luxury brand research organization, emphasized, "During a recession, 80% of luxury brand customers reduce consumption, but they account for 30% of total sales," adding, "The remaining 70% of sales come from 20% of the ultra-high-income group." He further explained, "They consider owning luxury products as a symbol of power very important regardless of whether there is an economic recession."

Amrita Vanta, Managing Director of Agility Research, a research organization specializing in wealthy consumer behavior, said, "The wealth gap has deepened further due to the COVID-19 pandemic, intensifying this consumption polarization," and predicted, "As the disposable income of the highest income group has increased since the pandemic, consumption of such luxury products will increase further."

This content was produced with the assistance of AI translation services.