Personal Luxury in Germany

PROSPECTS

The next downturn in personal luxury is triggered

As economic indicators reveal a slowdown, consumer confidence is dropping to new low levels in Germany after a strong decade of growth and prosperity. The strong growth rate in personal luxury, supported by the performance of luxury leather goods and luxury eyewear, is rapidly ceasing.

Store-based retailers overhaul the luxury shopping experience

Historically, store-based retailing was responsible for the vast majority of total sales within personal luxury in Germany. Very little change was seen among the major retailers until internet retailing became a clear threat to their ambitioned growth rates.

Development of the internet environment is a challenge to major brands

With the development of infrastructures related to internet retailing, delivery times and process quality have increased considerably. As a consequence, several new personal luxury retailing businesses have emerged, some quite generic and others focused on niche markets such as Juwelier24 within luxury jewellery.

COMPETITIVE LANDSCAPE

LVMH eyes the position as leading player in personal luxury

LVMH Moët Hennessy Louis Vuitton SA was very close to reaching the leading position in personal luxury in 2018 in terms of value share. The business conglomerate saw a strong and solid performance in Germany throughout 2018, which can be explained by its extensive portfolio focused on a range of categories within personal luxury, decreasing the potential risk of underperforming ones.

Hugo Boss struggles while Kering rises at a fast pace

Hugo Boss AG had another disappointing year in Germany in 2018. Despite Hugo Boss remaining the number one brand within personal luxury in Germany, its value sales have rapidly declined within designer apparel and footwear (ready-to-wear) during a relatively high growth period for the category.

Concentration among the top brands increases substantially

During the review period, the concentration among major companies in personal luxury increased, especially for the biggest business conglomerates. While acquisition has been the basis of their business model concept, naturally translating into higher value sales, brand developments have consistently earned the top performing players greater value share.

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