In the middle of a cost-of-living crisis that seems to be getting worse by the day, a lot of retailers look quite exposed. As their disposable incomes fall, consumers are tightening their belts and cutting back on spending. But one retail category, situated at the more exclusive end of the market, possesses a customer base and product range that should cope well amid the economic headwinds pounding the global economy.
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Pricing power
- Strong returns on equity
- American expansion
- UK market leader
Bear points
- D2C risk
- Poor share price momentum
That category is luxury watches. For those willing to drop a multiple of the average UK annual salary on a Girard-Perregaux, for example, it is unlikely that fluctuations in home energy costs or the weekly food shop are going to dissuade them from taking the plunge.