Luxury’s ‘relentless bid’ shows no signs of stopping
source link: https://finance.yahoo.com/news/luxurys-relentless-bid-shows-no-signs-of-stopping-172444228.html
Go to the source link to view the article. You can view the picture content, updated content and better typesetting reading experience. If the link is broken, please click the button below to view the snapshot at that time.
Luxury’s ‘relentless bid’ shows no signs of stopping
they picked up on Fifth
On Wall Street, when buyers rush in to buy everything in a particular market, hand over fist, price be damned, it's called a "relentless bid."
Usually this happens when investors see a bull market forming and want to get in early.
It appears a relentless bid is hitting an adjacent market — high-end luxury goods.
Yahoo Finance has been writing about this phenomenon for some time now, whether it be high-end cars, watches, or even boats. There are even luxury ETFs that can capture this conspicuous consumption.
Analysts assumed inflation would tame extravagant shoppers, but so far that's not been the case. Luxury shoppers are still buying at a clip despite price hikes.
Ferrari needs more higher-priced cars
Most recently this phenomenon was seen in Ferrari’s (RACE) financial results. The Italian supercar maker reported profit jumped 13% year over year, boosted by the sales of its ultra-high end cars, and expects 2023 to be even bigger. The automaker is expecting 2023 sales to hit a record 5.7 billion euros, with margins boosted by sales of its seven-figure Daytona SP3 hypercar, and upcoming Pursangue ultra-SUV.
“These figures provide the base for an even stronger 2023, fueled by a persistently high demand for our products worldwide,” said Ferrari CEO Benedetto Vigna in a statement. “Despite a complex global macro-scenario, we look ahead with great confidence.”
Ferrari said its “mix/price variance” was slightly negative because its multi-million dollar Monza SP1 and SP2 were phased out in Q1 2022, and Ferrari didn’t have any ultra-high end, high-priced models for sale until later in the year. It seems Ferrari could have sold more higher priced cars, if it had any to sell.
Watchmakers hike prices to keep up
Watch conglomerate Swatch Group (UHR.SW), behind brands like Omega, Bregeut, and Blancpain, reported in its latest results that sales were up 25% in local currencies across all territories except China. Sales were so strong that Swatch saw the need to hike prices overseas of popular watches like the Omega Speedmaster, Seamaster, and Longines Hydroquest by 5-7%, this according to an analysis done by Jefferies.
Recommend
About Joyk
Aggregate valuable and interesting links.
Joyk means Joy of geeK