"Conspicuous consumption isn't dead, it's just been on hold. The luxury consumer will be ready to spend again within the next year.”
This view is shared by the Richman's IMC, the soon to be launched chain of International Millionaire's Clubs, whose memberships have been reported to be the world's most expensive private club membership...
Acccording to a story by Lauren Sherman in Forbes referring to the global consulting firm, Bain & Company's Luxury Market Update: 2012, which will be released tomorrow, the luxury goods industry is poised for full recovery in 2011.
The Bain & Co report is authored by Claudia D'Arpizio, a partner based in the firm's Milan office. The study covered some 220 luxury brands, which includes leather goods, fashion, jewelry, alcohol and cosmetics companies that serve high net worth customers, or those with assets of US$1 million or above.
Growth to return: The global luxury industry has seen steady growth for the last 15 years but contracted by just 10% in the first two quarters of 2009 to 153 billion euros (or $215 billion), compared with 170 billion euros ($238 billion) in the first two quarters of 2008.
D'Arpizio says this decrease does not reflect a permanent change in the spending habits of the luxury consumer. Consumers were tiring of the recession and will start spending more freely again within the next year and a half.
Some other key findings from the report:-
- Spending is expected to pick up again in 2011, with a full recovery in 2012. Global sales of luxury goods will stabilize in 2010 and increase by 4% in 2011 and by 7%-8% in 2012.
- Consumers in emerging markets like China, India, Eastern Europe and Russia will begin aggressively spending as soon as the stock market fully rebounds.
- China will see a 7% increase in sales of luxury goods in 2009. The less-developed interior of the country will see increases up to 35%.
- High-end shoes are still selling well because of their accessible price point ($400-$2,000) and perceived quality.
- Luxury brands whose core business is leather goods--such as Louis Vuitton, Gucci and Hermes will fare better over the next two years than those who focus on high fashion, such as Christian Lacroix.
While many luxury industry experts are in agreement that the sector will rebound in 2011, there are still others who believe that this downturn is different from others, and that consumers will permanently cut back on spending, particularly in the U.S. We shall see... Click here for the full story from Forbes...
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