Luxury brand sales on the rise
The outlook for the luxury goods market has shown significant improvement in the past year, boosted by a stronger-than-expected US and Europe rebound and surging demand in China and Middle East, stores are reporting that customers were paying the full price. Strong tourist flows in Europe, coupled with a pick-up in sales at US department stores, contributed to this recovery
The luxury sales are projected to grow 5-6% in 2012 and 2013, led by emerging markets buyers and strong demand in Europe and the United States.
Luxury sales in mainland China rose 30% in 2010 and are forecast to grow 25% this year to €11.5bn, while US luxury sales are set to grow 8% to €52bn in 2011, after rising 10% in 2010 to €48.1bn.
Japan, which used to be the world’s biggest luxury goods buyer and is now in third place behind mainland and greater China combined, is expected to see luxury sales fall 5% this year at constant exchange rates to €17bn.
LVMH sales in Japan fell 9% in the first quarter and 25% in March alone, though Dior favoured Brazil over India as the next big source of growth after China, as India’s lack of retail space and preference for traditional dress and home-made jewellery made it tough for European brands to penetrate.
Brazil’s luxury sales totalled €1.8bn in 2010 and are set to grow 10-15% between 2010 and 2013, Bain estimated. In Russia, sales of €4.8bn in 2010, growing 5-10% by 2013.
The Middle Eastern market, worth €4.1bn in 2010, is likely to grow 10-12% over the same time-span.
Overall, global luxury goods sales were set to reach a record €185bn this year compared, with €172bn in 2010.
In 2009, the worst year on record for the industry, global luxury sales fell 11% in nominal terms, with much of the decline concentrated in the United States and Southern Europe.
