The super-rich owners of luxury brands Hermès, Tiffany and Chanel have brought in tens of billions more dollars this year as shoppers continue to buy designer accessories.
As the rest of the world bears the brunt of red-hot inflation — and hundreds of U.S. retailers are forced to close their stores — sales of designer goods are skyrocketing.
It has led experts to label the market as “recession-proof” – with shoppers undeterred by skyrocketing prices, even after the cost of some Chanel handbags has risen by as much as 17 percent this year.
The trend is partly driven by young people who live at home with their parents and choose to spend the money they save on rent.
And it’s good news for the billionaires behind the brands – the majority of whom are French.
The super-wealthy owners of luxury brands Hermès, Tiffany and Chanel have brought in tens of billions of dollars more this year – despite heightened economic uncertainty
The world’s richest woman L’Oreal president Francoise Bettencourt Meyers, 69, pictured, has seen her net worth rise by $21.8 billion since the start of the year
LVMH owner Bernard Arnault – whose empire Christion Dior, Tiffany & Co. and Moet & Chandon Champagne – saw his wealth skyrocket by $48.6 billion from the start of the year.
It means the 74-year-old is now worth $210.7 billion, making him $47 billion richer than Twitter CEO Elon Musk, according to Bloomberg’s Billionaires Index.
Arnault told investors this week that “business is going well” – despite the broader economic uncertainty.
Meanwhile, the world’s richest woman L’Oreal president Francoise Bettencourt Meyers, 69, saw her net worth increase by $21.8 billion since the start of the year.
Bettencourt, whose grandfather founded the beauty empire, is now worth $93.3 billion.
L’Oreal – whose luxury division sells brands such as Lancome, Yves Saint Laurent (YSL) perfume and Helena Rubenstein – saw its sales rise 13 percent in the first quarter of the year compared to the same period in 2022.
Meanwhile, handbag maker Hermès reported a 23 percent increase in sales in the first three months of the year.
Known for its Birkin and Kelly bags, the brand is still largely run by the descendants of founder Thierry Hermès.
The family was ranked the fifth richest in the world in October.
Separately, François Pinault, owner of Kering, has seen his wealth rise 24 percent year-to-date to $44.3 billion.
LVMH owner Bernard Arnault – whose empire Christion Dior, Tiffany & Co. and Moet & Chandon Champagne – saw his wealth skyrocket by $48.6 billion from the start of the year
Chanel owners Alain and Gerard Wertheimer saw their wealth together increase by $14 billion, while Francois Pinault, owner of Kering, saw his wealth rise 24 percent year-to-date to $44.3 billion.
Kering owns a handful of luxury fashion houses, including clothing from Gucci, Balenciaga and YSL.
The French brothers Alain and Gerard Wertheimer, who own Chanel, also saw their wealth increase by $14 billion.
The retained brothers are worth $50.2 billion each, according to Bloomberg’s ranking.
Last year, a report by management consulting firm Bain & Co. that the US luxury goods industry was “recession-resistant” thanks to its popularity with young consumers living with their parents.
The research found that about 72 percent of the market is made up of millennials — those born between 1981 and 1996 — or Generation Z — those born between 1997 and 2012.
Bain predicted the designer goods market would grow 21 percent this year – despite other economic challenges elsewhere.
Earlier this year, Claudia D’Arpizio, a senior partner at Bain and Co., told Dailymail.com that young people are partly trying to make up for all the experiences they missed during the pandemic.
She added that many people in their twenties had already endured a financial crisis as a child in 2008, meaning the current cost-of-living crisis has had a “diminished impact” on their consumer confidence.
Hermès raised its prices by about 7 percent at the start of the year – well above the usual annual increase of 2-3 percent
“The luxury market has many drivers for resilience, including a diffuse YOLO culture, a desire to experience missed experiences and a change in consumer attitudes,” said D’Arpizio.
It’s because dozens of designer fashion houses have raised their prices – despite continuing to make healthy profits.
This year, Philippe Blondiaux, Chanel’s CFO, said the brand should increase its prices in 2023 “to account for currency fluctuations and inflation.”
The price of a Chanel classic small flap bag increased by 17 percent, from $8,200 to $9,6000.
Meanwhile, the cost of a Chanel Reissue Large Bag rose from $9,500 to $11,000.
Similarly, Hermès raised its prices by about 7 percent at the start of the year – well above the usual annual increase of 2-3 percent.