How ‘quiet luxury’ is subtly taking over investor portfolios

Quiet luxury was one of last year’s biggest viral fashion trends on social media — but unlike other short-lived fads on TikTok or Instagram, this one has made its way into investor portfolios and shown actual returns.

So what is “quiet luxury”?

The trend revolves around understated, subtle displays of opulence and popular shows like HBO series “Succession” have also played a part in boosting its popularity.

Gone are the days of loud, flashy displays of wealth in fashion — it is now all about subtlety and minimalism.

But the trend has not only gained traction in the fashion world, even investors are starting to take notice.

Luxury stocks have long been regarded by some as an effective hedge against inflation. This is largely to do with the segment’s high pricing that seldom deters its affluent customer base and much higher margins than many other consumer discretionary products, such as televisions or phones.

In essence, the segment’s fundamentals have not changed drastically over decades but as the quiet luxury movement takes hold, investors are starting to cherry pick names that largely check those boxes.

Some of the companies and their labels have encapsulated what experts say is the essence of quiet luxury, with data from Southeast Asia’s largest lender, DBS Bank, showing that such names have been able to outperform their “loud” counterparts in 2023.

Some of the top companies that have benefited from this new wave are Hermes, Prada-owned Miu Miu, Brunello Cucinelli, Compagnie Financière Richemont and Swatch Group, according to DBS.

“With the quiet luxury movement underscoring growing consumer preference for subtlety in luxury consumption, companies…