Top 15 Luxury Fashion Companies in the World
In this piece, we will take a look at the top 15 luxury fashion companies in the world. For more luxury fashion companies, head on over to Top 5 Luxury Fashion Companies in the World.
Fashion is one of the most lucrative industries in the world. The popularity of luxury and high-end goods both among the rich and the poor is in a large part attributed to human and social psychology. Ever since evolving from monkeys to our current day state, sociologists and scientists believe that humans have prioritized evolutionary behavior to find a mate and signal to others that they have status, resources, and power.
These conclusions are also backed by research. A study conducted by researchers from the University of California outlines that consumers can be divided into four groups based on their need for wealth and status. These groups are wealthy consumers with low and high needs of status and non-wealthy customers with low and high status needs. The research outlines that the four groups' preference for luxury goods, both conscious and subconscious, is correlated to their desire to either associate or dissociate with their social strata. It concludes by sharing that the wealthy who do not want to showcase their status tend to make purchases that are inconspicuous and are recognizable only by their social class. On the flip side, the wealthy with a high need for status make flashy purchases to signal to those that are below them in society's rank that they are different. Finally, the less wealthy with a high need for status tend to purchase low cost counterfeit luxury goods as they aim to 'emulate' the wealthy.
This basic human desire has spurred a multi-billion dollar industry full of glitz and glamour as well as produced the world's richest man as of April 2023. While Tesla chief Elon Musk dominated the world's rich list for a good part of last year, right now it's the French fashion boss Bernard Arnault who is worth $238 billion as of April 2023. At the same time, while Mr. Arnault's wealth might stun you, it is almost a tenth of the total worth of the global fashion industry. According to estimates from McKinsey, the global fashion industry generated $2.5 trillion in revenue before the coronavirus pandemic hit and devastated the retail sector by shuttering down shops and stopping foot traffic.
At the same time, the industry also roared back soon after the pandemic, with McKinsey pointing out that between 2020 and 2021, the fashion industry's revenues grew by 21%. The products' profitability also improved, as overall the fashion industry's margins doubled during the same time period, from an earlier 6% to 12.3%. Yet, the historic inflation that pummeled global populations in 2022 also hit the industry, with its growth slowing down during the second half of 2022. Yet, McKinsey also points out that 2023 will be a good year for the fashion industry, particularly since the gap between luxury and non luxury products will grow. This is due to the simple fact that the wealthy are generally insulated against the effects of inflation, and they can afford to continue their spending as opposed to the broader population which has to make some sacrifices to manage the high costs of living.
In numeric terms, McKinsey points out that the luxury fashion market will grow between 5% and 10% this year, with China leading the growth as its projections place the figure to range between 9% and 14%. The U.S., on the other hand, will mirror the broader market growth rates, and Europe will continue to struggle with its depreciating currency and high energy costs as it deals with the aftermath of the Russian invasion of Ukraine. Compare this to McKinsey's forecasts for the non-luxury segment, which lay out everything ranging between a 2% contraction and a 3% growth. Geographically speaking, France is the hub of the global fashion industry, with three of the top five largest French companies in market capitalization being French firms.
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Adding to this, the chief executive officer of Capri Holdings Limited (NYSE:CPRI), an American luxury holding company of several leading brands such as Michael Kors and one of the biggest luxury fashion firms in the world, mirrored the conclusions reached by McKinsey during the firm's third quarter of fiscal of 2023 earnings analyst call where he outlined:
Overall, our performance in the third quarter was more challenging than we anticipated. However, many aspects of our business performed well. In particular, we were pleased with the continued growth in our own retail channel across all three of our luxury houses. This is a testament to the strength of our powerful iconic brands: Versace, Jimmy Choo and Michael Kors as well as the success of our strategic initiatives. However, we were disappointed with the performance of our global wholesale revenue in the quarter. Additionally, revenue in Mainland China declined significantly due to the surge in COVID cases as the country reopened. Now turning to third quarter performance in more detail.
Revenue decreased 6% on a reported basis and 1% in constant currency. Total company retail sales increased mid-single digits globally in constant currency. New customer acquisition was a key driver of growth as we added more than 12 million new names to our database versus the prior year. This is the largest year-over-year increase in our history. The growth in our own retail channel as well as our large and growing customer database demonstrates the strength and desirability of our brands. However, sales in our wholesale channel declined approximately 20%, driven largely by Michael Kors. Operating margin of 16.9% was below prior year. This reflected the sales mix shift between retail and wholesale, as well as increased marketing expense to support growth and build longer-term brand equity.
With these details in mind, let's take a look at some of the largest luxury fashion companies in the world, out of which the top picks are Hermès International Société en commandite par actions (OTCMKTS:HESAY), LVMH Mo?t Hennessy - Louis Vuitton, Société Européenne (OTCMKTS:LVMUY), and Christian Dior SE (OTCMKTS:CHDRY).
Andrea Meling/Shutterstock.com
Our Methodology:
To compile our list of the world's biggest luxury fashion companies, we first listed down all firms in the fashion industry. Then, whether public or private, their market value was calculated, with estimates from Fashion United used for the market value of the private companies. Then, the luxury fashion firms were picked for this article, and the top fifteen luxury fashion companies in the world as ranked by their market capitalization are listed below.
Top 15 Luxury Fashion Companies in the World
15. Patek Philippe SA
Latest Valuation Estimate: $7.62 billion
Patek Philippe SA is one of the most well-known watch companies in the world which was set up in Switzerland in 1839. Along with Hermès International Société en commandite par actions (OTCMKTS:HESAY), LVMH Mo?t Hennessy - Louis Vuitton, Société Européenne (OTCMKTS:LVMUY), and Christian Dior SE (OTCMKTS:CHDRY)., it is one of the top luxury fashion companies in the world.
14. Puig
Latest Valuation Estimate: $9.52 billion
Puig is a Spanish company headquartered in Barcelona. It was set up in 1914 and is a family owned business. Puig owns a wide variety of fashion and perfume brands, such as Herrera, Paco Rabanne, and Nina Ricci. It also has stakes in Jean Paul Gaultier and Dries Van Norton.
13. Swarovski
Latest Valuation Estimate: $11 billion
Swarovski is one of the oldest companies on our list since it was set up in 1895. The firm makes and sells glass jewelry and crystal glass, and it is a family owned private business.
12. Burberry Group plc (LON:BRBY.L)
Latest Valuation Estimate: $11.75 billion (1GBP = 1.24USD)
Burberry Group plc (LON:BRBY.L) is a British firm that is headquartered in London. It is one of the oldest countries in our list, since it was set up in 1856.
11. Giorgio Armani S.p.A
Latest Valuation Estimate: $14.7 billion
Giorgio Armani S.p.A is one of the more well known luxury fashion companies in the world. It has almost a dozen brands in its portfolio, which cater to the needs of young adults, adults, babies, and toddlers, catering to people with different price points.
10. Prada S.p.A. (OTCMKTS:PRDSY)
Latest Valuation Estimate: $17.9 billion
Prada S.p.A. (OTCMKTS:PRDSY) is an Italian firm that is headquartered in Milan. It was set up in 1913 and makes and sells a wide variety of products such as handbags, clothes, accessories, and jewelry.
9. Moncler S.p.A. (OTCMKTS:MONRF)
Latest Valuation Estimate: $18.5 billion
Moncler S.p.A. (OTCMKTS:MONRF) is an Italian luxury fashion company based in Milan, Italy. The firm operates its own retail stores and has more than two hundred outlets all over the world.
8. Rolex SA
Latest Valuation Estimate: $29.84 billion
Rolex SA is one of the best known luxury brands in the world. It is headquartered in Switzerland and was set up in London in 1905. Some of its watches have been sold for millions of dollars.
7. Chanel Ltd
Latest Valuation Estimate: $57.46 billion
Chanel Ltd is a well-known French fashion brand that is a rare entry on our list that was set up by a woman. It caters to female high-end luxury fashion needs.
6. Kering SA (OTCMKTS:PPRUY)
Latest Valuation Estimate: $74.02 billion
Kering SA (OTCMKTS:PPRUY) is a high-end luxury fashion company that was set up in 1963 and is headquartered in Paris. It makes and sells cosmetics, perfumes, watches, and other products.
Hermès International Société en commandite par actions (OTCMKTS:HESAY), Kering SA (OTCMKTS:PPRUY), LVMH Mo?t Hennessy - Louis Vuitton, Société Européenne (OTCMKTS:LVMUY), and Christian Dior SE (OTCMKTS:CHDRY) are some of the biggest luxury fashion firms in the world.
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Disclosure: None. Top 15 Luxury Fashion Companies in the World is originally published on Insider Monkey.