Sector resilient as shoppers switch to brands and own boutiques.
Luxury sales growth is outstripping forecasts and watches and jewellery are leading the charge, according to new research by consultancy firm Bain & Co.
Despite the economic downturn the company has found that demand for top-of-the-range brands is still strong and claims that sales are expected to rise 10% this year to €191 billion (£166.26bn). Previous forecasts for the growth of luxury sales had been more modest at 8%.
The 10th edition of Bain’s Luxury Goods Worldwide Market Study claims that watches and jewellery have the strongest sales growth of all the luxury goods sectors it has investigated. Other sectors monitored include fashion, cosmetics and accessories.
It has forecast growth of 18% for watches and jewellery in 2011 and said that more consumers are migrating from unbranded luxury purchases to branded purchases.
The report also noted a shift in the retail distribution of luxury goods from wholesale channels to own-store boutiques. It forecasts 14% growth for brand-owned stores, which is 50% higher than the growth forecast for third-party retailers, and estimates that own-store boutiques now represent 30% of luxury sales worldwide.
Bain & Co partner and the report’s lead author Claudia D’Arpizio said: “Top brands are now master retailers as well. Product still matters, but retailing strength has let luxury brands take control of their growth more than ever before.”
The report claims that there has been a surge in demand for luxury goods in Europe and the US, as well as emerging markets China and South America, and it expects demand to continue to rise.
D’Arpizo adds: “Despite the headwinds of global events and economic uncertainty, luxury is experiencing a sort of anti-crisis. We expect to see the sector continue to outperform other categories, if brands stay as nimble as they have been in their approach to recovery.”