Consumers returning to luxury brands. Investors should too: Analyst

Consumers are returning to the luxury goods sector with updated versions of iconic brands such as Tiffany & Co. along with Louis Vuitton. Retail analyst Oliver Chen told CNBC that will This specific’s a not bad place for investors to be too.

“Tiffany can be very exciting,” Chen, managing director along with senior equity research analyst at Cowen Outperform, said Wednesday on “Power Lunch.”

“They’re becoming a lot more modern,” he said. “Customers are returning to Tiffany on the heels of brand-new collections, brand-new product, as well as brand-new campaigns that will are innovative, fun, disruptive, as well as tying back to the history of the brand.”

“along with that will blue box can be iconic,” Chen said.

On Wednesday, the high-end jeweler beat first-quarter earnings estimates with better-than-expected sales inside the Americas along with Asia. Shares surged about 17 percent along with were on track to mark the company’s best day since 2001.

nevertheless Tiffany isn’t the only luxury company outperforming.

Chen, who covers retail along with luxury goods at Cowen, said his firm likes the luxury goods sector, including brands such as Moet Hennessy Louis Vuitton along with Sotheby’s, along with said This specific can be “a not bad spot for investors to be in.”

Businesses that will specialize in discounted goods — such as TJX Companies, which owns off-cost stores Ross Stores along with Marshalls, along with Costco — are thriving. nevertheless Chen pointed out that will some cost-cutting measures may affect margins, which in turn affects investors. The analyst said jewelry brands such as Tiffany can leverage prices to get better returns for investors.

“Grocery, food, apparel, where there’s less differentiation, that will becomes a problem, along with people compete on cost,” the analyst said.

“along with that will’s a big factor for retail over the long term, especially with Amazon along with others,” Chen said. “Competing on the basis of cost can be very competitive.”

In fact, Tiffany’s success may be in part because This specific can be “un-Amazonable,” Chen said, referring to experiences that will can’t be bought online.

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