As global demand for luxury declines, retailers are under pressure. However, Rolex is standing out with rising Australian sales and profit growth, suggesting that measured pricing and strong brand loyalty might help shield premium brands from the broader slowdown.
Across high-end fashion and accessories, the post-pandemic luxury surge appears to have passed. Brands such as Chanel, Louis Vuitton and Burberry are experiencing double-digit sales declines, affected by lower tourist numbers and weaker domestic demand. Amidst this slump, Rolex has emerged as one of Australia's few luxury success stories, increasing its market share while others lose ground.
Rolex’s revenue in Australia rose to $414.4 million for the year ending December, up from $374 million. Net profit climbed almost 25% to $107 million. This performance places Rolex well ahead in a category where most luxury labels are reporting steep declines. Analysts attribute some of this success to Rolex’s restrained global price increase of 4.8% in January, which helped maintain its appeal while other brands implemented steeper hikes that damaged their image.
The strength of the secondary market is also bolstering Rolex. Resale prices have grown dramatically, increasing 555% over 15 years according to one reseller. This has drawn in younger consumers who value long-term investment potential. Meanwhile, brands that raised prices aggressively, with average retail values climbing 36% since 2020, are struggling to engage cost-conscious shoppers.
Broader industry conditions remain challenging. Chanel’s Australian sales fell 17% to $496 million. Louis Vuitton’s local revenue dropped 19% to $572 million and profits were down 6%. Burberry’s sales declined to $55 million. Richemont showed no significant growth, despite stable overall performance. Tourist spending, particularly from Chinese travellers who were once a major source of luxury revenue, remains well below pre-pandemic levels and continues to weigh on the sector.
Rolex’s resilience in this environment indicates that brands committed to value and price moderation may have an edge under the changing luxury landscape. As tourism patterns shift, consumer habits evolve and economic pressures persist, luxury companies may find that aggressive pricing and image-driven strategies no longer assure success.
