From Lvmh to L’Oréal, here’s who drives fashion on the stock market

Global stock exchanges are back in the spotlight. The MFF Luxury stock index, the first luxury and fashion max index introduced by MF Fashion, is back. It examines global market trends for over 70 listed companies. Additionally, four new rankings have emerged this year. From the New York stock exchange to Piazza Affari, from the Eastern stock exchanges like Hong Kong and Tokyo to the South American stock markets, the study was initially published in the special volume The New Rules. With the assistance and resources of the Milano Finanza intelligence unit database, the index looked at the performance of all fashion, luxury, and beauty stocks over the past 12 months, providing a comprehensive view of the industry.

At the start of September, the sector was showing a slight decline of nearly 3 percentage points from the previous year. As part of the analysis, we compared the data of turnover and ebitda 2023 in local currency of all companies in the sector divided by countries, then converted the same values into euros to classify the top ten. Among the global giants with eleven-figure revenues were first and foremost the French luxury conglomerate Lvmh, but also the beauty giant L'Oréal and the number one sportswear company Nike. With respective revenues of 86.1 billion, over 49 billion, and 41.1 billion euros in 2023, the three giants rank among the top 10 in the global fashion ranking for turnover. The fourth place is confirmed for the fast fashion giant Inditex, the parent company of brands such as Zara, Bershka, Pull&bear, Stradivarius, and Massimo Dutti, with its 32.5 billion euros, followed by the French Italian eyewear company EssilorLuxottica, which has reached 25.4 billion revenues.

In sixth position, Adidas. The German competitor of Nike, listed on the Frankfurt list, has confirmed its place in the ranking despite the decline in turnover reported in fiscal year 2023. In fact, over the period, revenues have slipped from 22.5 billion euros in 2022 to 21.4 billion euros. Hennes & Mauritz are the ones climbing the ladder. The Swedish group at the head of the fast fashion brand H&M has conquered the seventh position in the ranking, beating Kering thanks to a turnover that rose to 20.6 billion euros. But it was not only the Stockholm company that overtook the conglomerate led by François-Henri Pinault. The luxury giant Richemont, which is headed by high-end jewelry houses such as Cartier and Van Cleef & Arpels, has also gained a position thanks to its 19.9 billion euros, which led it to rank eighth.

Kering, the parent company of Gucci, Saint Laurent, Bottega Veneta, and Balenciaga, fell from seventh to ninth place. As a result of its brands' ongoing restructuring, the company’s 2023 revenues fell below the 20 billion mark, ending at 19.5 billion. With a turnover of 18.8 billion euros, the Japanese group Fast retailing, the parent company of Uniqlo, has overtaken the American cosmetics company Estée Lauder and closes the top 10 compared to the previous year. Luxury is the dominant factor when it comes to profitability. In the top 10 for ebitda still stands Lvmh, with over 29.9 billion reached in 2023, and follow Kering, Richemont and Hermès, but making their way into the ranking is also the fast fashion of Uniqlo. On the second step of the podium is L'Oréal, which reported an ebitda of 9.9 billion euros. A remarkable leap was made by Inditex, which saw its ebitda rise from 7.28 billion in 2022 to 9.39 billion last year.

Nike finished fourth on the podium with 6.9 billion euros, which is less than the 7.19 billion euros in 2022. The Kering Group's 2023 ebitda dropped from 7.15 billion to 6.65 billion euros as well. Under the leadership of South African businessman Johann Rupert, the Swiss conglomerate Richemont, which has listings in Zurich and Johannesburg, is gaining a position. The watchmaker, which includes Piaget, Vacheron Constantin, Panerai, Jaeger-LeCoultre, and Baume & Mercier, ended 2023 with an ebitda of 6.54 billion euros. And the historic Parisian maison Hermès, which follows in a short distance with 6.52 billion euros thanks to the solid performance of its products, is rising as well. The label is in fact considered by analysts to be the fastest-growing luxury brand, and last year it registered double-digit increases that have involved all categories and all markets. EssilorLuxottica loses ground instead, as their ebitda slowed in the 2023 exercise, coming in at 6.29 billion euros as opposed to 6.38 billion in 2022. They join the top 10 qualifying in ninth place with the group Fast Retailing, which has an ebitda of 3.89 billion euros. Closing the ranking is H&M, which has accelerated, bringing back 3.26 billion euros in 2023 ebitda.

The capitalizations at the close of trading on Friday, September 6, 2024, and the top performances over the previous 12 months on the same day were compared as part of the MF Fashion analysis. And it is the main components of the Cac 40 that dominate when it comes to large capitalizations, with the exception of Kering. They are outperforming their competitors Lvmh, L'Oréal, and Hermès in terms of market value. The three companies together have a total capital of over 712 billion euros. But while the first two have left on the ground 16% and 4% of their value in a year, respectively, Hermès’ market cap has improved by 5 percentage points.

The real novelty, however, is the recovery of fast fashion that, in a year, has climbed the top 10 of global fashion & luxury. The biggest leap was made by the Galician group Inditex, which on 6 September, the date on which this analysis was closed, saw its value rise to 145.2 billion euros compared with almost 110 billion last year in the same period. A performance that allowed the company to kick from fourth place a colossus like Nike down to fifth place after leaving almost 40 billion euros on the ground. But if you ask yourself who has achieved the best stock market performance, in twelve months to buy greater value were not the big names of the sector. With a 138% rise, the Us clothing group Abercrombie & Fitch saw its stock prices jump upwards to over 6 billion in capitalization. Followed by fellow countrymen Gap with a +76%, G-III apparel group, the parent company of Donna Karan and Karl Lagerfeld, with a +66%, and Kontoor brands, spin-offs of Vf corporations dedicated to the denimwear brands Lee and Wrangler, at +65%. The Danish jewelry brand Pandora closes the top 5, up in a year by 60 percentage points. (all rights reserved)