Shares in luxury goods companies rose on Wednesday, as LVMH set an upbeat tone with robust third-quarter sales, showing that shoppers have not lost their appetite for high-end designer fashions in the face of a gloomy economic backdrop.
Analysts have worried the luxury sector could be hit by deteriorating macroeconomic conditions over the fourth quarter and into next year, but LVMH executives gave an upbeat assessment of the resilience of its affluent client base.
“Luxury is not a proxy for the general economy,” Jean Jacques Guiony, chief financial officer, LVMH told analysts in a conference call on Tuesday after the sales figures were published.
He said he had seen no signs that lower product categories were underperforming - a category that has been closely eyed for signs of weakness.
Analysts have been on the look out for signs of weakness in more aspirational products as younger shoppers face rising living costs.
Guiony flagged a strong performance in watches - luxury products that tend to do well in an inflationary environment because they hold their value.
And he also noted a shift in purchases to gold jewellery, from silver, at Tiffany & Co.
LVMH shares were up 1.4% early on Wednesday, Richemont shares traded up 0.6% and Hermes shares were up 1.4%.
Hermes and Kering report third quarter sales on 20 October.
News by Reuters edited by Donna Ahern, Checkout. For more drinks stories click here. Click subscribe to sign up for the Checkout print edition.