Luxury companies thrive despite cost of living

STORY: A string of consumer companies reported this week that they are making money from their most expensive products.

And they expect to keep doing so, despite a cost of living crisis that shows no signs of abating.

Sharply higher interest rates, surging inflation, and an energy crisis have led many analysts to believe the global economy is heading towards recession.

But millions of wealthier consumers are sitting on cushions of savings built during the health crisis.

Now, they’re keen to treat themselves after two years of restrictions.

Fashion brand Hermes reported a record quarterly profit margin on Friday (July 29).

Sales rose sharply due to strong growth in Europe and the U.S. - China also rebounded.

The company said it does not expect any slowdown in any region - even though the company raised prices 4% this year.

It's not just in fashion where luxury is performing.

Carmaker Renault said a new strategy of selling fewer but more profitable cars had paid off.

It raised it forecast for full-year margins as a result.

And while wealthier consumers' savings are still being eroded by inflation, they currently seem focused on new-found freedoms.

British Airways also announced a return to profit on Friday for the first time since the global health crisis.

Many consumers, though, are worried the economy will get rapidly worse this winter.

In the UK, the cost ardy - and unable to spend on anything but absolute basics.