What makes luxury brands good investments?

Luxury brands often make good investments because they have strong customer loyalty, pricing power (ability to raise prices without losing customers), and consistent demand even during economic downturns. They typically have high profit margins and benefit from growth in wealthy populations worldwide, particularly in emerging markets.

What companies are included in this luxury brand group?

This group includes Ferrari (RACE), Capri Holdings (CPRI) which owns brands like Versace and Michael Kors, Estée Lauder (EL) for luxury cosmetics, Tapestry (TPR) which owns Coach and Kate Spade, Diageo (DEO) which owns premium spirits brands, and Marriott International (MAR) for luxury hospitality.

Why do luxury brands have "pricing power"?

Pricing power means a company can raise prices without significantly affecting demand. Luxury brands gain this advantage through exclusivity, quality craftsmanship, strong brand heritage, and emotional connections with customers. When people buy luxury, they're often purchasing status, identity, and experiences that make them less price-sensitive than with everyday products.

How do luxury stocks perform during economic downturns?

Luxury stocks often show resilience during economic downturns because their core customers—high-net-worth individuals—are typically less affected by economic fluctuations. While not completely recession-proof, luxury companies generally maintain stronger margins and recover faster than mass-market brands, making them potentially valuable portfolio diversifiers.

6 handpicked stocks

Invest in Luxury

Luxury brands offer more than just beautiful products—they deliver strong investment potential. This carefully selected group of stocks represents companies with exceptional customer loyalty, consistent revenue streams, and remarkable pricing power.

Han Tan | Market Analyst

Updated 2 days ago | Published at mai 21