3 Luxury Retailer Stocks

There are one million millionaires in China - and it's growing everyday, far outpacing the rate of growth in the US. Which stocks are best placed to profit from the emerging rich?

Emma Wall 26 November, 2014 | 4:36PM

Emerging market investors know the tale of the growing middle class well. Exports are no longer driving emerging economies – but domestically focussed companies cashing in on the steadily increasing disposable incomes of the masses. Urbanisation, growing wages and smaller families are leaving an increasing number of Chinese in particular able to achieve their western inspired aspirations – branded nappies, meat-rich diets and household technology.

But it is not just the middle class which are swelling in size. China has more than one million millionaires – defined as individuals with a personal wealth of 10 million yuan or $1.6 million, according to the Hurun Research Institute annual Wealth Report. And this figure is growing at a rate of 4% a year. In comparison, the US has 9.6 million households with a net worth of $1 million or more – and that number is largely due to recent stock market successes.

Despite the slow in economic growth in China the number of millionaires is expected to continue to rise. Much to the benefit of European luxury goods manufacturers; the older and the more renowned the retailer, the better. Prada – which enjoys an Italian heritage but a Hong Kong listing – gets nearly 40% of its sales in Asian countries and LVMH, who manages some of the best-known luxury brands including Louis Vuitton, De Beers and Dom Perignon.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Burberry Group PLC1,716.00 GBX-0.92
LVMH Moet Hennessy Louis Vuitton SE493.95 EUR-2.77
Prada SpA47.00 HKD-3.59

About Author

Emma Wall  is former Senior International Editor for Morningstar

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