Luxury Brands Like Hermes and Gucci Outperform Stock Markets Over 18 Years
A long-term investment in luxury brands would have delivered exceptional returns over the past 18 years. New research shows that a hypothetical portfolio inspired by iconic fashion labels—like those favoured by The Devil Wears Prada character Miranda Priestly—outperformed major stock indices by a wide margin. The study tracked performance from 2006 to 2024, revealing standout gains. Hermes, known for its Kelly and Birkin bags, surged by 2,206%. Kering, owner of Gucci, followed with a 149% return, while Richemont, the Cartier group, climbed 619%. Even Burberry, despite its challenges, managed a 92% increase.
Ralph Lauren delivered a 539% return, defying industry doubts about its staying power. The entire luxury portfolio, modelled after Priestly’s fictional tastes, returned 629%—beating the S&P 500 (442%) and the S&P global luxury index (297%). The sector’s resilience was further tested in recent months. Despite conflicts in the Middle East, Priestly’s portfolio still gained 28%. Analysts credit Hermes’ success to its rare discounting strategy, while Ralph Lauren’s steady performance countered scepticism about its brand strength.
The findings highlight the rewards of backing established luxury names over time. While broader markets grew steadily, top-tier brands like Hermes and Richemont delivered far greater returns. Investors in these companies benefited from their enduring appeal and pricing power.
