You read today that the Ralph Lauren shop in Nantucket was bustling with shoppers looking for high-end Purple Label products. American luxury is in at the moment, and European houses are having trouble competing. Carol Ryan and Jinjoo Lee report in The Wall Street Journal:
The best investment in the luxury goods industry over the past five years wasn’t one of the usual suspects such as Hermès. Instead, Coach owner Tapestry is the surprise leader, with Ralph Lauren a runner-up.
Shares in Ralph Lauren and Tapestry have gained 29% and 55%, respectively, this year, on top of total shareholder returns of more than 60% in 2024. Not bad for brands that are sometimes considered the poor cousins to pricier and more established European luxury names. As a multiple of forward earnings, Tapestry and Ralph Lauren’s shares no longer trade at steep discounts to the European luxury houses.
The recent earnings season showed a widening gap between the performance of European and U.S. brands. Coach increased sales by 13% from a year earlier in the latest quarter. Ralph Lauren grew 11%.
Action Line: Tell me what you’re seeing when you shop. Email me your observations of the retail scene in your area at ejsmith@yoursurvivalguy.com.
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