Shoppers could be up to £534 better off by resisting the urge to splurge for ONE week and buying shares instead
Fashionistas could be hundreds of pounds better off by investing just a fraction of the money they spend on clothes and shoes, new research from multi-asset investment platform eToro reveals.
To mark the start of London Fashion Week, eToro conducted research to find out how much shoppers could make if they resisted the urge to splurge and instead invested in the labels they love.
The average UK household spends nearly £44.90[1] a week – or £2,340 a year – on clothes and shoes, according to the Office for National Statistics.
If shoppers had taken that £45 and bought shares in BooHoo, the trendy online retailer popular with twentysomethings, five years ago, that investment would be worth £579.21 today – a whopping £534 profit.
Similarly, sporty types who used that £45 to invest in JD Sports would be sitting on shares worth nearly £384 now – a profit of £338 and enough to buy nearly four pairs of Nike Air Force 1 trainers[2].
eToro’s research reveals that shoppers would have also made money investing their £45 in other top fashion brands:
- Adidas (£384 profit over five years)
- Kering, the parent of luxury fashion brands Gucci and Alexander McQueen (£160 profit over five years)
- LMVH, the parent of Louis Vitton (£93 profit over five years)
- Nike (£52 profit over five years)
- ASOS, the popular online fashion retailer (£6 profit over five years).
Iqbal V. Gandham, UK managing director of eToro, says: “Ask any successful investor for their secret and they will tell you that it is best to invest in the companies you know and are passionate about. Whether you’re into fashion, sports or technology, you are much more likely to make a profit if you invest in the brands you love.
“Our research is proof that you can make some pretty hefty returns for the price of a Friday night outfit on BooHoo. So, the next time you’re looking for trainers on JD Sports or a new Gucci handbag online, why not take a second to research whether it is worth investing in the brands, too? It could pay off in the long run.
“The global fashion market is worth an enormous £1.4 trillion[3], meaning the sector is brimming with investment opportunities. Not only that, but the sector is home to some of the world’s most loved brands, meaning it is easy for would-be investors to do their research before they part with their money. If you love fashion, then it makes sense to start your investment journey here first.”
However, shoppers who had invested in Ted Baker – the worst-performing fashion brand in eToro’s study – would have seen their £45 shrink to £5.37 over the last five years.
Gandham adds: “Of course, while you give yourself a much better chance of making money when you invest in the brands that you love, there are no guarantees when it comes to investing. That’s why it’s important to make sure you don’t put all of your eggs in one basket and rather spread your money across a number of different shares.
“With online platforms such as eToro you can invest in a stock from as little as £40 as we have a low minimum investment and offer fractional shares. So investing really is accessible to the many not just the few.
“As well as diversifying, it’s also incredibly important that you invest for the long-term so you give your stock picks the best opportunity to repay your faith. In contrast to so much of today’s culture, investing isn’t about instant gratification. Hence, our examples look at what the short term ‘pain’ of not buying that Nike hoodie could return you if you invested the money over five years.”
How much you could have made in the past five years investing in the world’s leading fashion brands:
|
Brand |
Total 5-year return based on £45 investment |
Total profit |
% increase/decrease |
|
BooHoo |
£579.21 |
£534.21 |
1187.1% |
|
JD Sports |
£383.68 |
£338.68 |
752.6% |
|
Adidas |
£204.54 |
£159.54 |
354.5% |
|
Kering (Gucci) |
£138.57 |
£93.57 |
207.9% |
|
LVMH (Louis Vuitton) |
£117.03 |
£72.03 |
160.1% |
|
Nike |
£97.20 |
£52.20 |
116% |
|
ASOS |
£51.10 |
£6.10 |
13.6% |
|
Next |
£43.11 |
-£1.89 |
-4.2% |
|
ABF (Primark) |
£41.90 |
-£3.10 |
-6.9% |
|
H&M |
£26.62 |
-£18.38 |
-40.8% |
|
Ted Baker |
£5.37 |
-£39.63 |
-88.1% |
Figures based on share prices as at 2pm on 10/02/2020.
[1]https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhousehold
[2] Nike Air Force 1 ’07 LV8, £85 on 10/02/2020: https://www.jdsports.co.uk/product/white-nike-air-force-1-07-lv8/15969975/
[3] https://www.commonobjective.co/article/the-size-of-the-global-fashion-retail-market