Luxury goods giants Hermes and Richemont have reached a significant milestone by securing a spot in the esteemed Euro STOXX 50 equity index. This accomplishment is expected to bolster the demand for their stocks, which have been experiencing exceptional performance and reaching all-time highs. The addition of these companies to the index will prompt investment funds that track the Euro STOXX 50 to include these stocks in their portfolios, further enhancing their value.
The global luxury goods industry has experienced a strong resurgence this year, as consumers have returned to department stores that were severely impacted by the COVID-19 pandemic and subsequent lockdowns. This positive trend has greatly benefited luxury goods companies, and this success is clearly reflected in the soaring share prices of Hermes and Richemont.
Hermes, renowned for its iconic handbags and accessories, reported impressive sales in the third quarter of the year, surpassing expectations. As a result, its shares have surged by nearly 90% in 2021, reaching unprecedented record highs. Richemont, owned by South African billionaire Johann Rupert, also announced better-than-expected financial results for the first half of the year, leading to a significant increase in its share price.
On the other hand, two prominent companies, Universal Music Group and telecoms company Vodafone, will be exiting the Euro STOXX 50 index. This showcases the dynamic nature of the index, with new participants replacing previous ones based on their market performance.
The inclusion of Hermes and Richemont in the Euro STOXX 50 is not only a testament to their individual successes but also to the resilience and growth of the luxury goods sector as a whole. Investors and market analysts will closely monitor the impact of their addition to the index, as it is expected to stimulate further growth and investor interest in these esteemed brands.
Overall, this achievement highlights the remarkable performance of Hermes and Richemont in the luxury goods industry and solidifies their positions as global leaders in the market. With potentially increased demand for their shares, these companies are poised to continue their upward trajectory and capitalize on the positive momentum in the luxury goods sector.
Useful links:
1. Forbes: Hermes Stock Hits Record High – Here’s Why You Should Pay Attention
2. Bloomberg: Ralph Lauren Among Luxury Firms Warning of Cost Squeeze
