Like Bitcoin and sports cars, there’s been a drop in demand for luxury goods throughout the past six months. According to Watch Charts Rolex Index, the average price of a Rolex watch on the secondary market has dropped about 25% since March 2022.
Canada Goose Holdings Inc (NYSE: GOOS), a brand that produces expensive luxury winter coats and Peloton (NASDAQ:PTON) Interactive Inc (NASDAQ: PTON), a company that makes expensive exercise bikes, both reported disappointing earnings this week, driving their respective stocks lower.
Canada Goose revised its forward guidance, citing uncertain macro conditions and headwinds in mainland China, a big market for Canada Goose. Conversely, Crocs, Inc. (NASDAQ: CROX), a shoe maker that specializes in cheap, rubber shoes noted for their holes, raised its full-year guidance and the stock was trading up more than 15% Thursday afternoon.
Related Link: Five Ways To Save Money In A Recession
Some experts argue luxury goods are somewhat insulated from economic downturns, as wealthy customer bases are typically still able to purchase expensive goods. But it appears that there has been a significant drop in demand for luxury goods such as Rolex watches and Canada Goose jackets.
RH (NYSE: RH), formerly Restoration Hardware, a luxury-goods name, has also been hit. Its stock is down more than 65% from its August 2021 highs. The company’s CEO, Gary Friedman, warned of a drop in demand for luxury goods back in March in a CNBC interview.
A year ago when Bitcoin (CRYPTO: BTC) was above $60,000, maybe there were more people with an appetite for expensive items. But with interest rates creeping higher, demand has waned across the board, from equities to Peloton bikes.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.