How Quiet Luxury Has Made Its Way Into Investor Portfolios and Shown Impressive Returns

In the world of fashion, trends come and go like changing seasons. One trend that stood out last year was quiet luxury. Unlike many other fleeting fads that pop up on social media, quiet luxury has proven to be more than just a passing craze. It has caught the attention of investors and shown real returns.

Understanding quiet luxury

So, what exactly is quiet luxury? It's all about showcasing wealth in a subtle and understated manner. Instead of flaunting flashy logos or extravagant designs, quiet luxury focuses on elegance and sophistication. TV shows like "Succession" have played a part in popularizing this trend, highlighting the allure of understated opulence.

A shift in fashion trends

Gone are the days of loud and ostentatious displays of wealth in the fashion world. Now, it's all about embracing simplicity and minimalism. This shift in mindset reflects a broader cultural change where people are moving away from conspicuous consumption towards more refined tastes.

Quiet luxury in the investment world

But it's not just fashion enthusiasts who are embracing quiet luxury; investors are also taking notice. Luxury stocks have long been seen as a safe bet against inflation. The high prices of luxury goods rarely deter affluent customers and the profit margins are often higher than other consumer products like electronics.

The performance of quiet luxury companies

As the quiet luxury movement gains momentum, investors are cherry-picking companies that embody its principles. These companies focus on quality, exclusivity, and scarcity, resonating with consumers who appreciate understated elegance. Data from DBS Bank shows that such companies have outperformed their "loud" counterparts in recent years.

Top players in quiet luxury

Some of the top companies benefiting from this trend include Hermes, Miu Miu, Brunello Cucinelli, Richemont, and Swatch Group. These brands have captured the essence of quiet luxury and have seen significant growth as a result.

Long-term investment outlook

Unlike short-lived viral trends, investors are taking a long-term view when it comes to quiet luxury. They see the value in investing in companies with a heritage of quality and craftsmanship. In the Asia-Pacific region, the demand for luxury goods is evolving with markets like South Korea, Japan, and India becoming increasingly important.

The growing market in Asia

India, in particular, presents a significant opportunity for luxury brands. With a rising affluent population, there is a growing demand for high-end products and experiences. Goldman Sachs predicts that by 2027, around 100 million people in India will be considered affluent, opening up a lucrative market for luxury brands.

Impact on traditional luxury brands

The rise of quiet luxury has also had an impact on traditional luxury brands. Companies that rely on loud and flashy branding like Gucci and Burberry have seen their positions in global luxury rankings decline. In contrast, brands associated with quiet luxury such as LVMH and Hermes are considered better investments by analysts.

To sum up, quiet luxury represents a shift towards more refined and understated forms of wealth and status. Both consumers and investors are embracing this trend, recognizing the enduring appeal of quality, elegance, and exclusivity.