Deloitte – Global Powers of Luxury Goods, 2023

Luxury goods companies have rebounded to pre-pandemic levels of profitability and are now focusing on transitioning towards a more environmentally responsible and circular economy business model. This shift is driven by customer demand and increased regulatory pressure. Technology, particularly Artificial Intelligence (AI), machine learning, and the Internet of Things (IoT), is playing a crucial role in accelerating this green transition. These digital innovations are not only transforming customer experiences but also revolutionizing sustainability, supply chains, and product authenticity. During FY2022, the top 100 luxury goods companies generated composite sales of US$347 billion, indicating a sharp increase compared to the US$305 billion recorded in FY2021. The 17 companies with luxury goods sales exceeding US$5 billion contributed almost 70% of the total top 100 sales, emphasizing the significance of these major players in the industry. Companies with sales of US$1 billion or less contributed only 6.4% to the overall sales. The composite performance of the top 100 companies in FY2022 reflects their recovery from the impact of the COVID-19 pandemic. With stores reopening, travel and tourism resuming, and consumer demand recovering, the luxury industry is showing positive signs. The net profit margin for the 80 top 100 companies reporting net profits in FY2022 was 1.2 percentage points higher than the previous year, at 13.4%, surpassing pre-pandemic levels. This report not only explores the trends reshaping the luxury goods market but also examines the performance of the 100 largest luxury goods companies in terms of geographies and product sectors. The report highlights the industry's adoption of AI and the circular economy as transformative forces. The ongoing transformation of the luxury sector is expected to redefine the industry, enhance customer experiences, and promote sustainability. As technology and luxury converge, the potential for innovation seems limitless.