High jewelry is becoming a new battlefield in the luxury goods industry, but the profit margin is much lower than that of design jewelry, and brand value is more important than pro

Street Signal | High jewelry is becoming a new battlefield in the luxury goods industry, but the profit margin is much lower than that of design jewelry, and brand value is more important than pro

The Bernstein report focuses on the Haute Joaillerie category in the global luxury goods industry, pointing out that it has the characteristics of extremely high unit price, low sales volume, and strong brand halo, and more and more brands are increasing their presence.

However, the profit margin of fine jewelry is actually lower than that of design jewelry, and its core value lies in brand building and high-net-worth customer acquisition rather than direct profit contribution. The report sorted out the characteristics of the high-speed beads series of brands under Richemont, LVMH, Kering and other groups for investors.

The market generally believes that Gaozhu is a "high-end" trend in the luxury goods industry, but its weak profitability may be underestimated. It is more of a brand marketing tool than a money printing machine. One sentence conclusion: Gaozhu is the crown jewel of brand building in the luxury goods industry, but it is not a profit engine.

The return on investment is more reflected in the improvement of brand value and the locking of core customers. Good news/bad news: Good news for luxury goods groups such as Richemont Group (CFR.SWX) and LVMH (MC.PA) that have a strong presence in the high-end and pearl fields.

The market has already recognized the trend of Gaozhu, but its lower profit margin characteristics may be underpriced, and it is still necessary to pay attention to the overall synergy of the brand. Catalysts:

1) Product releases and sales data of high-end jewelry series of various luxury goods groups;

2) Changes in consumption trends of ultra-high net worth customer groups.