(Bloomberg) — Luxury investors worried about China have elsewhere to look nowadays for new pockets of growth: the U.S.
Part of the outperformance of luxury stocks such as Hermes International this year is due to the strength of U.S. demand for pricey handbags, jewels and designer clothes. It’s not all about post Covid-19 pent-up demand though, according to Jefferies International Ltd.
There’s a surge in asset values, from stocks to real estate and contemporary art, and even more importantly, there’s a significant impact from cryptocurrency wealth that could benefit luxury-goods makers, Jefferies analyst Flavio Cereda wrote in a note on Wednesday, detailing feedback from a recent trip to New York and Florida.
“The U.S. continues to surprise” and the resilience of momentum in the country may help mitigate current China volatility, Cereda wrote.
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U.S. buyers of luxury today are younger and more affluent than in the past, Cereda wrote. He estimates that local “superspenders” account for $20 billion of the total, which is more that twice that from Europe, though still well below China.
One company that’s set to profit is Louis Vuitton owner LVMH, which Cereda describes as a “structural post-pandemic winner,” with overexposure to North America versus China. Gucci owner Kering SA also is among luxury players that stand to benefit, he wrote.
