Milan—Despite what you’ve been hearing about “economic uncertainty” these days, luxurygoods are expected to post a 10% gain this year thanks to demand from Greater China and helped along by strong rebounds in jewelry, watches and accessories.
According to a study conducted by Bain & Co. for Altagamma Foundation released today, worldwide luxurygoods sales this year should increase to 191 billion euros, up from a previous prediction for an 8.0% increase in 2011, but below the 13% increase posted in 2010.
While “the global economic situation is difficult” the luxury sector “is in good health and is growing above all in Asian markets,” said Santo Versace, chairman of Versace and the Altagamma Foundation of Italian luxury companies that commissioned the study.
‘Leather Accessories were the Growth Champion’
Noting that Chinese consumers (including Hong Kong, Macau and Taiwan) now account for more than 20% of total worldwide luxurygoods consumption, Bain reported that luxurygoods sales in Asia are expected to jump 25% this year on top of a 28% increase last year.
“China remains the champion of the regions with 35% growth in 2010 and the same expected for 2011, reaching 13 billion euros,” the report stated.
The reports cited the “American” region is outperforming Europe with an 8% increase, “thanks to the strong rebound of leather accessories in 2010, and to an increasing penetration to tier 2 and tier 3 cities and locations.” Specifically Brazil, where sales will increase 25% this year, was cited as particularly strong.
By classification, jewelry and watches posted an extraordinary rebound following 2009 as retailers restocked inventories and brands expanded into emerging markets. Sales grew 23% in 2010 and are expected to grow again, about 18% this year especially as Asian markets undergo a “retailization” in these categories and most female consumers purchasing especially in emerging markets, Bain said.
Accessories, which posted a 17% increase in 2010, are expected to rise 13% this year. “Leather accessories were the growth champion” in 2010 as sales grew 22% and are expected to increase 16% this year due to “strong performances across all geographies and increasing men spending especially in Asia.”
Footwear also have been growing, with sales up 16% in 2010 and expected to increase this year 11% thanks mostly to increased sales of “lower price points products.”
Meanwhile, apparel, which had a 12% increase in 2010, is expected to rise 8% this year, the report stated. Most notably “a rebound of womenswear products and brands with high fashion content for special occasions in the high end segment.”
Looking ahead, Altagamma forecast sales in European markets growing by 3.75% next year, sales in North America up 6%, sales in the Middle East up 8.75%, sales in Latin America up 10%, and an 1.75% increase in Japan, the world’s second-largest luxury goods market after the United States.
But sales growth in Asia will far out pace other markets, with 16.5% growth, Altagamma reported.