LUXURY GOODS SALES LIKELY TO BE HIGHER
Bain expects 2-4pc growth this year led by stronger spending in Europe and China
PARIS group Bain & Co and Italian luxury industry association Altagamma showed.
The luxury goods sector has suffered in the past couple of years from fewer tourists coming to Europe after a wave of militant attacks on the continent, less business in Hong Kong and slowing demand in China.
In October, Bain had forecast 2017 growth of one to two per cent for the luxury sector, but the industry managed to grow four per cent year-on-year in the first quarter.
“After a difficult 2016, the first quarter of this year brought some relief to the luxury industry. The continuous repatriation of Chinese consumption as well as a positive outlook in Europe both for locals and tourists will help drive overall market growth during the remainder of the year,” said Bain partner Claudia D’Arpizio.
Bain does not name specific companies, but in the first quarter of this year luxury giants LVMH, Kering and Hermes all posted strong results.
Bain partner Federica Levato, another of the authors of the report, said: “It’s a healthier growth than before. So we have revised our market forecast for this year. Some players who are doing well are really outperforming.”
Europe, which is starting to see tourists returning, is expected to be the fastest growing market for luxury goods this year, with sales seen up seven to nine per cent.
Bright spots were Spain, seen as a relatively safe destination, and Britain, rendered more affordable to tourists after a postBrexit slump in sterling, while mainland China was also recovering with six to eight per cent growth, said the report.
Bain predicted that sales in the rest of Asia could shrink two to four per cent this year.
Hong Kong, Macau and Singapore are on the mend but Taiwan and Southeast Asia face a fall in tourist numbers from China and South Korea, while Japan was seen as staying flat. Reuters