The world of fashion may appear to some as a fluffy, vacuous domain populated by models and fashionistas draped in the latest bizarre creations, but it is a valuable sector – demonstrated this week by the £2.3billion mega-merger of luxury fashion websites Net-a-Porter and Italian giant Yoox.
Combined sales of the two websites is almost £1billion, and the desire to purchase the latest 1970s-inspired designer fringe handbag or bohemian floral cape has fuelled these businesses’ growth.
Dedicated followers of fashion who often spend the average monthly salary on Net-a-Porter items justify their extravagance by calling it an ‘investment’ piece – as do fashion addicts, though they sometimes comfort themselves with the thought that what they are buying is a ‘classic’.
But rather than buying a handbag should a savvy shopper instead invest in the retailers themselves?
Shares in the major luxury brands have soared over the past half decade, and even British upstart Mulberry, whose shares crashed in 2012, is still a top performer if you take a five-year view. Even with Italian brand Prada lacklustre this month – because of the crackdown on lavish spending in China – investors have not been put off the sector.