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Luxury Recession arrived?
- Thread starter k1976
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Diamond prices have fallen 18% from their peak — and analysts say there’s still more room to plunge
PUBLISHED WED, JUN 21 20238:04 PM EDTUPDATED THU, JUN 22 20239:15 PM EDT- Diamond prices are down 18% from their all-time highs in February 2022, and are lower 6.5% year-to-date, according to one Global Rough Diamond Price Index.
- And market watchers predict their value will dive further.
- Diamonds, alongside other jewelry, saw elevated prices during the Covid-19 pandemic which culminated in a peak early last year.
Diamond prices are down 18% from their all-time highs in February 2022, and are lower 6.5% year-to-date, according to one Global Rough Diamond Price Index. And their value is about to dive further, market watchers predict.
“A slightly better-than-average-quality 1-carat natural diamond was $6,700 a year ago, today this same diamond is selling for $5,300,” Paul Zimnisky, the CEO of Paul Zimnisky Diamond Analytics, told CNBC.
Diamonds, alongside other jewelry, saw elevated prices during the Covid-19 pandemic which culminated in a peak early last year.
“A slightly better-than-average-quality 1-carat natural diamond was $6,700 a year ago, today this same diamond is selling for $5,300,” Paul Zimnisky, the CEO of Paul Zimnisky Diamond Analytics, told CNBC.
Diamonds, alongside other jewelry, saw elevated prices during the Covid-19 pandemic which culminated in a peak early last year.
In the bear case scenario, he expects natural diamond prices to record a drop of between 20% to 25% from current prices in the next 12 months, which would mark a 40% drop off the February peak. And Daga is not alone.
“There is room for continued price declines, and that is a very likely scenario, especially since retailer margins for lab grown diamonds are especially high, around 60% compared with 34% for natural diamonds,” said Golan.
“There is room for continued price declines, and that is a very likely scenario, especially since retailer margins for lab grown diamonds are especially high, around 60% compared with 34% for natural diamonds,” said Golan.
Sanctions on Russian diamonds
Additionally, diamond market watchers are not expecting sanctions on the world’s leading producer, Russia, to lead to severe price spikes.Earlier in May, the G7 economies convened a discussion on imposing sanctions on Russian diamonds, with the United Kingdom taking the lead in sanctioning Russia’s state-owned company Alrosa.
“The Russians have ramped up diamond sales in recent months in an attempt to claw back market share lost last year following the disruption in trading,” Zimnisky stated.
Russia is the world’s largest producers of diamond, followed by Botswana and the Democratic Republic of Congo, according to the Diamond Registry.
According to Edahn, Russia will face no issues selling its diamonds despite the sanctions, especially if the larger buyers continue to take a shine to Moscow’s prized stones.
“Countries like India, UAE, and even the EU, didn’t place sanctions on rough diamond imports. So again, no real shortages,” he said.
Hermès is a byword for exclusivity. Its signature Birkin bag, one of which sold for $450,000 last year, cannot be bought from the luxury firm’s website or by simply walking into a store. There are neither ads in fashion magazines nor glossy campaigns on Instagram. For the not-so-famous, owning a Birkin can involve a years-long waiting list.
Part of the reason for the wait is constrained supply, which Hermès manages with the precision worthy of its stitching. But another part is booming demand for all manner of luxury goodies. Last year net profits of Kering, which owns fashion labels such as Gucci and Balenciaga, rose by 14%. Those at lvmh, owner of Tiffany and Louis Vuitton, among other brands, grew by nearly a quarter. Hermès and Richemont, which owns Cartier, among other baubles, each saw theirs surge by more than a third. Together, the four groups raked in over €33bn ($35bn) in profits, on combined revenues of around $130bn.
Part of the reason for the wait is constrained supply, which Hermès manages with the precision worthy of its stitching. But another part is booming demand for all manner of luxury goodies. Last year net profits of Kering, which owns fashion labels such as Gucci and Balenciaga, rose by 14%. Those at lvmh, owner of Tiffany and Louis Vuitton, among other brands, grew by nearly a quarter. Hermès and Richemont, which owns Cartier, among other baubles, each saw theirs surge by more than a third. Together, the four groups raked in over €33bn ($35bn) in profits, on combined revenues of around $130bn.
How luxury giant LVMH built a recession-proof empire
PUBLISHED THU, MAY 18 2023 8:00 AM EDTUPDATED THU, MAY 18 2023 9:23 AM EDTLuxury giant LVMH Moët Hennessy Louis Vuitton, more commonly known as LVMH, has grown into a $500 billion powerhouse conglomerate of 75 distinguished brands, or "maisons," rooted in six different sectors — with no plans to slow down.
The company recorded revenue of 79.2 billion euros, or about $86.3 billion, last year, an increase of 23% from 2021 revenue. Its store count has more than quintupled over the past two decades, with locations across 81 countries and more than 196,000 employees worldwide.
Its stock reached an all-time high in April of above $199 per share, making the Paris-based firm the first European company to surpass $500 billion in market value.
Some experts have long-hailed the company as "recession-proof," able to sustain itself through economic downturns and boasting products that uniquely appreciate over time.
At the helm of the massive ship is LVMH CEO Bernard Arnault, the world's richest person according to the Forbes real-time billionaires index.
Some say Arnault's strength lies in identifying companies with longevity. His most recent acquisition was Tiffany & Co. for $15.8 billion in 2021.
"When he talks about potential acquisitions, he's not looking for the brand that's hot right now. He's looking for a brand that he thinks can be here 100 years from now," said Anish Melwani, chairman and CEO of LVMH for North America.
Some experts have long-hailed the company as "recession-proof," able to sustain itself through economic downturns and boasting products that uniquely appreciate over time.
At the helm of the massive ship is LVMH CEO Bernard Arnault, the world's richest person according to the Forbes real-time billionaires index.
Some say Arnault's strength lies in identifying companies with longevity. His most recent acquisition was Tiffany & Co. for $15.8 billion in 2021.
"When he talks about potential acquisitions, he's not looking for the brand that's hot right now. He's looking for a brand that he thinks can be here 100 years from now," said Anish Melwani, chairman and CEO of LVMH for North America.
Though managed by LVMH, each maison has creative control over its own brand, with its own C-suite executives and mission.
"That loss of efficiency that other companies would just put a bunch of brands together and have them run by one person, what we get is that true accountability," Melwani said.
This is reflected in LVMH's ability to consistently deliver products that build on its brands' legacies, in conjunction with current trends and culture. LVMH consistently collaborates with celebrities, fashion icons and influencers in order to stay relevant for the younger luxury crowd.
Melwani said that after the Covid pandemic the company is focused on expanding its brick-and-mortar stores, which are needed due to the extraordinary growth from LVMH's e-commerce and digital channels.
Remaining relevant is key to longevity in luxury — and LVMH's strategy in building a brand that not only endures but continues to excel.
"That loss of efficiency that other companies would just put a bunch of brands together and have them run by one person, what we get is that true accountability," Melwani said.
This is reflected in LVMH's ability to consistently deliver products that build on its brands' legacies, in conjunction with current trends and culture. LVMH consistently collaborates with celebrities, fashion icons and influencers in order to stay relevant for the younger luxury crowd.
Melwani said that after the Covid pandemic the company is focused on expanding its brick-and-mortar stores, which are needed due to the extraordinary growth from LVMH's e-commerce and digital channels.
Remaining relevant is key to longevity in luxury — and LVMH's strategy in building a brand that not only endures but continues to excel.
https://www.google.com.sg/amp/s/amp...ecialist-watchfinder-cuts-prices-rolex?espv=1
- After an unprecedented surge in 2021 and 2022, the pre-owned luxury watch industry is going through a rapid decline as watch dealers and investors flood the market with supply
- Prices for the once highly sought-after Rolex Daytona, Patek Nautilus and Audemars Piguet Royal Oak models have all dropped, but lower-priced brands like Cartier are moving up the list
The Bloomberg Subdial Watch Index, which monitors the prices of the 50 most-traded watches by value in the secondary market, fell by 1.4 percent over the past month according to data from Subdial, a U.K.-based platform for selling and trading pre-owned watches.
The drop was primarily driven by price declines of the Rolex Explorer II (down 3.4 percent in a month to an average price of $9,875) which features a GMT hand and a fixed 24-hour bezel, and several models of the Patek Philippe Nautilus, according to Bloomberg. The Nautilus 5711/1A-010 with a blue dial decreased by 2.9 percent to $102,333 while the Nautilus Travel Time 5990 is down 2.7 percent to $130,882.
The drop was primarily driven by price declines of the Rolex Explorer II (down 3.4 percent in a month to an average price of $9,875) which features a GMT hand and a fixed 24-hour bezel, and several models of the Patek Philippe Nautilus, according to Bloomberg. The Nautilus 5711/1A-010 with a blue dial decreased by 2.9 percent to $102,333 while the Nautilus Travel Time 5990 is down 2.7 percent to $130,882.
The chinks filled their coffers. They have to thank those corrupt officials and their family trees.
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