Wealthy splashing out even more than before coronavirus pandemic

Well-timed: Sales of Cartier watches are up as the wealthy have excess cash to spend

The fortunes of the world’s biggest luxury goods groups have been lifted by a splurge on expensive jewellery, watches, fashion and champagne as billions in spare cash is spent on big-budget treats. 

Sales at 11 of the largest luxury groups and their brands have grown by a fifth on average compared with 2019, before the pandemic began. And they have more than doubled on last year. 

The analysis by US financial services company Jefferies revealed many of the firms had cited strong demand in the US where $2.5trillion (£1.75trillion) in savings and a $1.9trillion stimulus package have left many with spare cash. 

Savings on work travel, school fees and holiday costs – as well as readily available Government loans for small firms – have also unleashed a torrent of spending on high-end goods here in Britain. 

Jewellery sales at Richemont, three quarters of whose business is jewellery and watches, outperformed those of many of its big rivals in the three months to the end of June, with a rise of 38 per cent globally compared with the same quarter in 2019, Jefferies said. Richemont’s Americas region drove much of the demand for its products, rising 276 per cent in the second quarter compared with the same period last year. 

Richemont owns the jewellery giant Cartier and watch brands Jaeger-LeCoultre and Piaget, as well as Montblanc, Chloé and Dunhill. Johann Rupert, Richemont’s chairman, earlier this year said he was ‘pleased’ with sales at Cartier and noted his watch business was ‘in a very healthy state’. 

Faster retail openings in the US as well as a surge in online purchases globally and higher than anticipated spending in the West and Asia meant that the sector was now set to shatter growth expectations this year, Jefferies said. 

Watches of Switzerland last week said sales of watches and jewellery had nearly doubled in the past 13 weeks, compared with a year ago. 

Louise Deglise-Favre, a fashion analyst at GlobalData, said: ‘The US has been bouncing back from Covid quite well and luxury brands have had tremendous growth there this year. There has been more disposable income thanks to the stimulus cheques, extra funds and other side-effects of Covid-19. What will be interesting is to see whether that will continue or whether this is an exceptional year. But the luxury consumer is shifting to a younger demographic. So maybe these big brands are also beginning to tap into a much wider audience – basically getting in with the cool kids.’

She said Louis Vuitton, owned by LVMH, recently launched major campaigns with high profile influencers on social media to appeal to younger audiences. Other brands have also sought to target younger shoppers. Last month TAG Heuer, also owned by LVMH, launched a $2,150 Super Mario watch as part of its connected range – with a firm eye on the gaming community. 

Hermes said demand had been sustained in both its classic models and new ones such as the compact Hermes Della Cavalleria bag. LVMH said its Celine ready-to-wear and leather collections, created by designer Hedi Slimane to rejuvenate the brand, had done well. 

Eddie Bloom at Bloombar Watches in London, which trades in preowned watches, said his sales doubled to £14million between 2020 and 2021 as cancelled holidays, private schools cutting fees as lessons took place on Zoom and a fall in living expenses left many with little to do with their money. 

He said: ‘There is a big shift as younger people get into watches. It has become a serious status symbol, wearing a Rolex Daytona or a Patek Philippe Nautilus.’ 

This post first appeared on Dailymail.co.uk