Posted by Barry Silverstein on October 22, 2010 02:40 PM
Executives at such luxury brands as Burberry, Louis Vuitton, and Versace can breathe a sigh of relief. The annual luxury market study by leading consultant Bain & Company is bullish on high-end goods, predicting a strong 2011. According to Bain, sales of global luxury goods should break the 2007 record next year.
Not surprisingly, demand by Chinese consumers for luxury goods — some call it "label lust" — will drive the uptick, with growth of as much as 30 percent. Europe will see a 6 percent rise, while Japan will recover more slowly. The U.S. luxury goods market, which dropped 15 percent this year, may see a 12 percent increase in 2011.
Luxury goods marketers were positively giddy at the news. Santo Versace, chairman of the Italian fashion brand Versace and chair of Altagamma, an Italian luxury goods association, proclaimed, "In the first half of this year we talked about a light at the end of the tunnel. On the basis of the preliminary 2010 figures, we can confirm that positive trend."
The latest figures from high-end marketers seem to support the Bain forecast. LVMH, owner of such brands as Burberry, Gucci, Krug, and Louis Vuitton, enjoyed a 14 percent increase in third quarter sales. Burberry, also an LVMH brand, reported that in the first six months of 2010, sales in its Chinese stores were up 25 percent.
Not all luxury goods will see improvement, however; Bain predicts that luxury yachts will likely experience a "double digit" decline in sales. Overall, Bain said, leather bags, jewelry, shoes and watches would be the biggest risers with an expected gain of around 8 percent next year.