A mini-renaissance in luxury shopping is setting the luxury sector on a positive trajectory for this year.
.According to an analysis of 220 luxury goods firms by consulting firm Bain & Co, sales in the sector are set to grow by 4% this year to €158 billion ($192 billion). The study was made in cooperation with the Italian trade group Fondazione Altagamma and follows an 8% slump in 2009.
Bain analyst Rudolf Pritzl noted a return to luxury shopping as consumer trust improves and the travel market recovers: “After three painful years customers are beginning to buy again.”
The trend is particularly positive amongst wealthy Asian consumers who remain committed to expensive accessories, shoes and leather goods.
Indeed, the firm predicts noticeable geographical variation: the growth rate for luxury shopping in Asia is estimated at 15% this year; 4% growth in North and South America and 3% growth in Europe. Analysts believe that this heralds an important shift in “target markets for the manufacturers."
From a more psychological perspective, Pritzl’s observation was that, “The temporary phenomenon of ‘luxury shame’ is disappearing in more mature markets [and] the attraction of luxury goods is returning at the same time.”
Santo Versace, chairman of Fondazione Altagamma congratulated the sector on what they were doing right: “Many brands have concentrated themselves on their core businesses and invested massively in product design and innovation.”
However, while the bigger luxury brands will be able to enlarge their market share and expand via diversification, he warned that many smaller companies will have to be prudent and may even be forced to contemplate mergers or take-overs.