Luxury & Fashion Major brands are implementing pricing increase

The luxury industry is still in a healthy place, with significant pricing power. 2021 was a great vintage for luxury goods, with average sales growth of 31% YoY and +9% on 2Y. At this stage, and without any tougher geopolitical tensions in Europe or in Asia, we remain quite confident for 2022 too, and anticipate 11% organic sales growth on average. 2022 will be a year of price increases in order to offset higher input costs (mainly transportation) or brand elevation strategy, and some groups/brands have already implemented significant price increase. We continue to favour LVMH in our universe thanks to its brands pricing power, especially Louis Vuitton but not only. We remain at Buy on Kering and on Richemont, while the current Hermès share price level can be seen as an opportunity, in our view, for long-term investors.