The Rise of Quiet Luxury: A Subtle Shift in Fashion and Investment Trends
Quiet luxury has emerged as one of the most captivating fashion trends of recent years, with its understated, subtle displays of opulence resonating with consumers and investors alike. Unlike fleeting fads on social media, quiet luxury has proven to be a long-term trend that is now making its way into investor portfolios. This article explores the concept of quiet luxury and its impact on the fashion industry and investment landscape.
The Essence of Quiet Luxury: Subtlety and Minimalism Take Center Stage
Gone are the days of loud, flashy displays of wealth in fashion. Today, it’s all about understated elegance and timeless quality. The rise of quiet luxury has been influenced by popular shows like HBO series “Succession,” which have helped shape the movement’s popularity. This trend reflects a growing consumer preference for subtle and minimalist luxury consumption, shifting away from overt symbols of extravagance. The focus is now on brands that embody understated sophistication and exclusivity.
The Investment Appeal of Quiet Luxury: A Hedge Against Inflation
Luxury stocks have traditionally been seen as a safe investment, due to their ability to withstand inflation and maintain high pricing. This resilience can be attributed to the segment’s affluent customer base and higher profit margins compared to other consumer discretionary products. As the quiet luxury movement gains traction, investors are increasingly drawn to companies that align with the trend’s principles. Analysts from Southeast Asia’s largest lender, DBS Bank, have identified several companies that exemplify quiet luxury, outperforming their “loud” counterparts in 2023. Among these companies are Hermes, Miu Miu (owned by Prada), Brunello Cucinelli, Compagnie Financière Richemont, and Swatch Group.
Sustaining Bifurcation in Performance: The Future of Quiet Luxury
Experts predict that the shift towards quiet luxury will continue to shape the industry’s dynamics and performance. Consumers’ preference for subtlety in luxury consumption is expected to drive the success of companies that prioritize understated elegance and timeless quality. DBS Bank’s chief investment officer, Hou Wey Fook, affirms that the ongoing trend towards quiet luxury will likely lead to sustained outperformance of these companies compared to their louder peers. DBS has identified several top picks that exemplify quiet luxury, including Hermes, Moncler, LVMH Moët Hennessy Louis Vuitton, Richemont, Swatch, Brunello Cucinelli, and Ermenegildo Zegna.
A Long-Term View: Investing in the Heritage of Quiet Luxury Brands
Unlike fleeting viral trends, investors are taking a long-term view when it comes to quiet luxury companies. Markus Hansen, portfolio manager at Vontobel Quality Growth Boutique, highlights the appeal of heritage brands that embody both high quality and longevity. Consumers and investors alike are growing tired of big logo items and seeking products that offer superior craftsmanship and a sense of tradition. This long-term investment approach aligns with the heritage and success of quiet luxury houses, making them attractive options for investors looking for sustainable growth.
A Shift in Demand in Asia-Pacific: Expanding Markets for Quiet Luxury
The narrative around luxury goods in Asia-Pacific is evolving, driven by China’s uneven post-pandemic recovery and shifting consumer demands. While Chinese consumers’ appetite for luxury goods remains strong, luxury brands are broadening their horizons to cater to other emerging markets in the region. Mature markets like South Korea and Japan are experiencing growing demand for quiet luxury fashion, while India is seen as the next big market due to its expanding middle class and rising wealth. With an estimated 100 million people in India projected to become “affluent” by 2027, luxury brands are keen to tap into this untapped market.
The End of Loud Luxury: The Power of Subtlety and Exclusivity
The rise of quiet luxury marks a departure from the era of loud, flashy displays of wealth in fashion. Subtlety and minimalism have become the gold standard, with consumers gravitating towards brands that offer understated elegance and timeless quality. This shift in consumer preferences is not only shaping the fashion industry but also capturing the attention of investors. Quiet luxury companies that embody exclusivity, scarcity, and high quality are proving to be successful performers in both the fashion world and the investment market, making a strong case for long-term investment in this emerging trend.
Analyst comment
Positive news: The rise of quiet luxury is a captivating and long-term trend in fashion and investment. It resonates with consumers and investors, emphasizing understated elegance and timeless quality. Luxury stocks aligned with quiet luxury principles are expected to outperform their flashier counterparts. The shift towards quiet luxury is expected to continue shaping the industry, driving the success of companies prioritizing understated sophistication. The expansion of markets in Asia-Pacific, particularly in China, South Korea, Japan, and India, further supports the growth of quiet luxury brands. Investing in heritage brands and tapping into emerging markets offers sustainable growth opportunities.
