One of the biggest trends in fashion in 2023 was “quiet luxury”, and it’s since gone mainstream and begun showing up in discerning investor’s portfolios with out-sized returns.
According to Wikipedia, quiet luxury is defined as “a lifestyle characterized by understated elegance and refined consumption, emphasizing exclusivity and discerning taste without overt displays of wealth. Other terms to describe the same concept include stealth wealth, old money aesthetic, or silent luxury.”
For the longest time the stock of luxury brands have been regarded as an effective hedge against inflation. Now investors are taking this investment thesis a step further and experiencing big returns on their investments as quiet luxury is having its time in the spotlight of pop culture.
Among the brands benefiting from this new quiet luxury trend are Hermes, Prada-owned Miu Miu, Brunello Cucinelli, Compagnie Financière Richemont and Swatch Group. If those are household brands you’re not familiar with, then you’re not part of the 1% (and you’re in good company, because the rest of us 99 percenters can only aspire to the type of wealth one needs to splurge on a $600 Hermes Cavalier en Formes scarf, or a Prada-owned Miu Miu $2,000 dollar Wander Matelassé Nappa leather hobo mini-bag (whatever that is).
Where did the quiet luxury brand come from?
The popular HBO series “Succession” helped to bring the term quiet luxury into most of our vocabularies and boosted its popularity, but it’s been around longer than that. It’s one of those things that if you have to ask what it is, you probably can’t afford it. Those in the know have known about “quiet luxury”, sometimes referred to as “stealth wealth” can trace its origins back to around 2013, when a Karine Dubner purchased Los Angeles-based label Brochu Walker and used her experiences working in the French fashion industry to turn Brochu Walker into a conscious luxury brand that supports sustainability efforts. Their line of sweaters, cardigans and dresses are all crafted from ethically-sourced, luxurious fibers, which amplifies the brand’s nod toward quiet luxury.
How did we get here?
During the late 2010’s to 2020 time period flashy logos on brands were all the rage. One only has to think of giant Ralph Lauren polo mark printed in full-size on the front of polo shirts to know that understated fashion was desperately needed in the marketplace, and that helped usher in the quiet luxury trend as wealthy consumers gravitated toward products that were make with high-end materials, quality, and craftsmanship. The marketing of these products was understated, subtle, and almost nonchalant in their marketing, which only added to their appeal.
Brands have long differentiated themselves based on the price points they market their products, and quiet luxury brands haven’t been shy about going upmarket in search of more discerning buyers who can afford understated fashion styles.
What hasn’t been understated has been the returns these companies have been posting. Quiet luxury companies in 2023 outperformed their more flashy competitors by 23% percent, translating to a healthy return on investor’s portfolios. The quiet luxury trend seems to have legs and has even seemed to be recession proof as consumers continued to spend in the second half of 2023, helped by the growing upper-middle class of growing countries like China and India.
How ‘quiet luxury’ is subtly taking over investor portfolios