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Cutting back on luxuries hits market hard
The global market for luxury goods will fall this year and will see scant growth in 2010, suggests a new report.
US consultancy Bain & Co expects global luxury sales to fall eight per cent this year – or 11 per cent at constant exchange rates – to 153bn euros (140bn) as the crisis saps demand for designer clothes, jewellery and watches. Bain forecasts an improving trend in the last quarter compared with the start of the year but sees the luxury goods market rising by only one per cent next year to 155bn euros.
"2010 will be a year of consolidation. We can start talking about recovery the following year, but you need to wait until 2012 to go back to pre-crisis levels," said Bain & Co partner Claudia D'Arpizio.
British luxury fashion house Burberry Group announced better than expected second quarter revenue last week, indicating consumer confidence may be improving.
Rising Asia-Pacific sales would be offset this year by an expected 16 percent drop in sales in the Americas, which accounted for nearly a third of the world market, Bain said.
China remains the fastest-growing major market for luxury brands.
However, projected sales growth this year of 12 per cent will be less than half last year's 30 per cent increase.
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