Key Takeaways
- • Cosmetics & Perfumes segment leads investor appeal at 63% attractiveness, followed by Clothing & Accessories manufacturing and Furniture (both 50%), signaling sustained demand across diversified luxury verticals despite macroeconomic headwinds.
- • Watches & Jewellery experienced a 19-point surge in investor interest year-over-year, alongside double-digit gains in Cosmetics & Perfumes (+10pts) and Clothing & Accessories manufacturing (+18pts), reflecting portfolio rebalancing toward high-margin personal luxury goods.
- • Hospitality, Automotive, Private Jets, and Cruises segments contracted by 9 points collectively, indicating investor caution toward capital-intensive, discretionary-dependent subsectors in an uncertain economic environment.
- • Three-year investment outlook favors Hotels and Watches & Jewellery over core Automotive, with Luxury Products and Restaurants expected to deliver significant growth, suggesting institutional capital is repositioning toward experiential and accessible luxury categories.
- • Fashion and luxury sector maintains institutional investor confidence despite supply chain pressures and geopolitical uncertainty, with the 8th edition of Deloitte's survey confirming sustained M&A activity and deal flow in 2022 underpinned by resilient consumer demand.
Summary
The fashion and luxury sector continues to command institutional investor attention as one of the most resilient alternative investment verticals, according to Deloitte's 8th edition Global Fashion & Luxury Private Equity and Investors Survey 2023. Despite a challenging macroeconomic backdrop marked by geopolitical tension and logistics cost inflation, the sector benefited from durable consumer demand and sustained M&A momentum throughout 2022, positioning it as an attractive deployment vehicle for private equity and alternative investors navigating broader market volatility.
Investor appetite has undergone notable segment rotation within the luxury ecosystem. Cosmetics & Perfumes emerged as the highest-conviction opportunity among survey respondents at 63% attractiveness, followed by a two-way tie between Clothing & Accessories manufacturing and Furniture, each at 50%. Watches & Jewellery recorded the most dramatic year-over-year improvement, gaining 19 basis points in perceived attractiveness, while Cosmetics & Perfumes expanded by 10 points and Clothing & Accessories manufacturing surged 18 points, reflecting increased confidence in personal luxury goods and discretionary accessories with higher EBITDA margins. Conversely, capital-intensive and economically sensitive segments contracted sharply: Hospitality, Automotive, Private Jets, and Cruises all declined 9 points collectively, signaling investor concerns about near-term demand elasticity and operational leverage in tourism-dependent and high-capex business models.
Forward guidance through 2026 indicates differential growth trajectories across subsectors. Hotels rank first in three-year investment prospects, closely followed by Watches & Jewellery, suggesting institutional capital expects sustained demand for luxury hospitality experiences and high-margin jewelry assets. Luxury Products and Restaurants also feature prominently in growth projections, while the Automotive segment is positioned as the least efficient opportunity on the forward-looking horizon. This bifurcated outlook reflects investor preference for asset-light, high-margin personal luxury and experiential consumption over traditional automotive luxury, which faces headwinds from electrification capex requirements and cyclical demand compression.
The survey underscores that despite macroeconomic uncertainty and operational challenges rooted in supply chain fragility, the fashion and luxury sector remains a preferred allocation target for institutional investors and private equity firms, supported by resilient consumer spending patterns and consolidation dynamics that continue to drive deal flow.
Investor appetite has undergone notable segment rotation within the luxury ecosystem. Cosmetics & Perfumes emerged as the highest-conviction opportunity among survey respondents at 63% attractiveness, followed by a two-way tie between Clothing & Accessories manufacturing and Furniture, each at 50%. Watches & Jewellery recorded the most dramatic year-over-year improvement, gaining 19 basis points in perceived attractiveness, while Cosmetics & Perfumes expanded by 10 points and Clothing & Accessories manufacturing surged 18 points, reflecting increased confidence in personal luxury goods and discretionary accessories with higher EBITDA margins. Conversely, capital-intensive and economically sensitive segments contracted sharply: Hospitality, Automotive, Private Jets, and Cruises all declined 9 points collectively, signaling investor concerns about near-term demand elasticity and operational leverage in tourism-dependent and high-capex business models.
Forward guidance through 2026 indicates differential growth trajectories across subsectors. Hotels rank first in three-year investment prospects, closely followed by Watches & Jewellery, suggesting institutional capital expects sustained demand for luxury hospitality experiences and high-margin jewelry assets. Luxury Products and Restaurants also feature prominently in growth projections, while the Automotive segment is positioned as the least efficient opportunity on the forward-looking horizon. This bifurcated outlook reflects investor preference for asset-light, high-margin personal luxury and experiential consumption over traditional automotive luxury, which faces headwinds from electrification capex requirements and cyclical demand compression.
The survey underscores that despite macroeconomic uncertainty and operational challenges rooted in supply chain fragility, the fashion and luxury sector remains a preferred allocation target for institutional investors and private equity firms, supported by resilient consumer spending patterns and consolidation dynamics that continue to drive deal flow.
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