Fashion might not be the first thing that comes to mind when you think of the stock market. In fact, fashion is something you might associate more with runways, glossy magazine pages, and dazzling storefronts than with financial portfolios or trading floors.Yet, beneath the stylish exterior of this glamorous industry lies a world of robust investment opportunities that savvy investors can capitalise on.
With forecasts suggesting a surge in market revenues to $1.94 trillion (around £1.5 trillion) by 2027 and a wardrobe-busting $2 trillion by 2028, fashion stocks represent not just a slice of elegance but also a piece of a rapidly expanding economic pie. If you’re thinking of getting yourself a piece of this pie, here are some of the best fashion stocks to buy in 2024 and beyond.
These aren’t necessarily the best fashion stocks to buy today, but here are the top holdings in the S&P Global Luxury Index. This is the industry benchmark for luxury global goods, but it does contain some stocks that aren’t strictly just in the fashion sector.
| Stock | Icon | 1-year performance (to Jan 2024) | 5-year performance (to Jan 2024) | Link to invest |
|---|---|---|---|---|
| Lululemon Athletica (LULU) |  | 53.41% | 212.62% | Invest with XTBCapital at risk |
| Tesla (TSLA) |  | 43.90% | 949.65% | Invest with XTBCapital at risk |
| Marriott (MAR) |  | 38.03% | 116.54% | Invest with XTBCapital at risk |
| Ferrari (RACE) |  | 36.51% | 201.37% | Invest with XTBCapital at risk |
| Hermes (RMS) |  | 11.03% | 264.99% | Invest with XTBCapital at risk |
| Mercedes-Benz (MBG) |  | -10.16% | 37.83% | Invest with XTBCapital at risk |
| Compagnie financiere Richemont (CFR) |  | -12.91% | 73.52% | Invest with XTBCapital at risk |
| LVMH-Moet Vuitton (MC) |  | -14.17% | 160.44% | Invest with XTBCapital at risk |
| Nike (NKE) |  | -20.55% | 25.00% | Invest with XTBCapital at risk |
| Kering (KER) |  | -32.38% | -14.21% | Invest with XTBCapital at risk |
Fashion is an umbrella term that refers to a broad spectrum of products. This includes clothing, footwear, accessories, beauty products, and any other item you wear to enhance appearance, style or comfort. Fashion stocks are the shares of companies involved in the design, production, marketing and sale of such products.
The fashion industry is very diverse, and so are the choice of fashion stocks you can invest in. Here’s a rundown of the main categories.
Many investors are comfortable investing in fashion because it’s a part of everyday life. Think about it, we see fashion virtually everywhere – from the streets we walk to the screens we watch.
For fashion aficionados, investing in fashion stocks presents an opportunity to grow wealth in a field they’re passionate about, with brands they admire. Of course, you shouldn’t just invest in a brand just because you like it, that’s a recipe for disaster. Make sure to research it thoroughly first to ensure it aligns with your investment goals and strategy.
| Response | Male | Female |
|---|---|---|
| Purely financial | 31.26% | 28.5% |
| Neither, I have never held any investments | 27.25% | 26.76% |
| Mainly financial, but partly passion | 16.63% | 19.82% |
| Unsure | 12.62% | 11.64% |
| Mainly passion, but partly financial | 8.41% | 10.01% |
| Purely passion | 3.73% | 2.96% |
| Neither, I am driven by a different reason | 0.1% | 0.31% |
Here are a few of the main benefits when it comes to investing in fashion:
Unfortunately, it’s not all silky smooth sunshine and rainbows, even for the best fashion stocks. Here are the not-so-glamorous elements of the fashion industry that you should be wary of before investing:
I think when it comes to investing in fashion, you always want to think about the wider economy. For example, global stimulus packages were great for luxury goods - people were treating themselves or pumping money into fancy stocks. And the wealthiest were becoming wealthier as the overall stock market grew.
Some fashion stocks have pricing power and can raise prices if costs rise due to inflation, which is why some of the lower-end, budget options have fared well in recent years. In 2024, if we see lower inflation and potentially lower interest rates (making it cheaper to borrow), I think it could be a good year for the non-essential fashion stocks. Maybe not luxury, but the firms that sit somewhere between basic and luxury.
If investing directly in the individual stocks of fashion companies isn’t your style, consider these alternatives:
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
The fashion world is more than just glitz and glamour. It’s also an industry that offers unique investment opportunities for investors, and the potential to build wealth.
However, like any other investment, it carries inherent risks. A smart investment approach at the best and worst of times includes: diligent research, awareness of current trends, diverse holdings, and a long-term perspective – all essential if you want to succeed with fashion stocks.
Footwear stocks can be rewarding, but there are risks involved that could impact your profits.
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