Fashionistas could be hundreds of pounds better off by investing just a fraction of the money they spend on clothes and shoes, according to new research from multi-asset investment platform eToro.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 GBP44.90 a week – or GBP2,340 a year – on clothes and shoes, according to the Office for National Statistics.
If shoppers had taken that GBP45 and bought shares in BooHoo, the trendy online retailer popular with twentysomethings, five years ago, that investment would be worth GBP579.21 today – a whopping GBP534 profit.
Similarly, sporty types who used that GBP45 to invest in JD Sports would be sitting on shares worth nearly GBP384 now – a profit of GBP338 and enough to buy nearly four pairs of Nike Air Force 1 trainers.
eToro’s research reveals that shoppers would have also made money investing their GBP45 in other top fashion brands:
● Adidas (GBP384 profit over five years)
● Kering, the parent of luxury fashion brands Gucci and Alexander McQueen (GBP160 profit over five years)
● LMVH, the parent of Louis Vitton (GBP93 profit over five years)
● Nike (GBP52 profit over five years)
● ASOS, the popular online fashion retailer (GBP6 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 GBP1.4 trillion, 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 GBP45 shrink to GBP5.37 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 GBP40 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.”