To begin with, there is no luxury company that is purely online; however, there are a number luxury companies with an online presence for a limited number of their brand’s products. Over the past few years, luxury shop sales have been growing fast. At the same time, online related sales have also grown and today total about EUR 9 billion, which is about 4% to 5% of the total luxury goods sales in volume. E-commerce related sales should grow above average across all luxury segments. This is because: a) consumers’ purchasing power is high, b) online presence is still very low, and c) an untapped market exists for specialist and premium watchmakers. Compared to the traditional online market, the luxury online market is challenged by a further complexity. Online payment facilities require additional authentications for higher amounts (for instance for debits above CHF 1,000) and this will inevitably lead to consumer disengagement.
| Company | Ticker | Sector | Upside Potential | Sharpe (FY01) |
| Swatch | UHR | Clothing & Accessories | 19% | 6.15 |
| Investment case: The company runs online shops for a small number of its products. Yet, high quality products and luxury products are still sold through an exclusive network of resellers or specialized boutiques. The company has tremendous untapped online market potential. Given the low online penetration in this segment, a new brand name, sold only online, could be complementary for the group and ring fence its business from the competition. | ||||
| Company | Ticker | Sector | Upside Potential | Sharpe (FY01) |
| Richemont | CFR | Clothing & Accessories | -6% | 4.61 |
| Investment case: Richemont is the second largest luxury company worldwide. CFR runs a multi-brand online luxury facility under the name Net-a-Porter. The company does not disclose any specific figures for the entity but it is estimated that about 5% of the sales are online based. The online presence in the luxury segment is relatively low, hence the upside potential is substantial. | ||||
| Company | Ticker | Sector | Upside Potential | Sharpe (FY01) |
| Tiffany | TIF | Specialty Retailers | 4% | 4.83 |
| Investment case: Tiffany is an international jeweller and specialty retailer. Company-branded merchandise is sold through its catalogue and on its website. The online presence of this diamond seller is exceptionally low, so there is substantial upside potential in all continents, but particularly in the US and Asia. | ||||
| Company | Ticker | Sector | Upside Potential | Sharpe (FY01) |
| YOOX | YOOX | Specialty Retailers | 44 % | 3.41 |
| Investment case: YOOX is running a multi-brand e-commerce platform, and is widely held by the market to be the specialist in product presentation. It has therefore created a competitive edge compared with the competition and should continue to be able to leverage its business on this USP. | ||||