The growing potential of luxury travel retail

As Deloitte’s latest Global Powers of Luxury report found, the world’s 100 largest luxury goods companies generated only $212 billion in 2015, down 4.5 percent year-over-year. Half of these luxury purchases, however, are made by travelers, a number that rises to 60 percent for those coming from emerging markets. On the other hand, travel retail overall accounts for $63.5 billion in total global revenue and is expected to grow to $85 billion by 2020. Consumers from Asia are the driving force behind this trend, accounting for $24 billion of that number. According to [...]

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Chinese luxury consumers: an in-depth analysis of their changing profile

With luxury consumption dropping in 2016 to its lowest level since 2009, much attention has been focused on one of the biggest forces in global luxury spending: Chinese consumers. As the Chinese economy slows, and growth in luxury consumption cools in China and abroad, there’s a growing concern among industry observers that Chinese consumers are losing their passion for luxury goods. For more than eight years,  McKinsey hasbeen monitoring the evolution of Chinese luxury consumers and their increasing influence on the global luxury-goods market. Recently the company has issued a new report Chinese luxury consumers: [...]

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Can art boost sales for luxury brands?

For several months, FENDI‘s Palazzo della Civilita Italiana has been hosting an exhibition of works by the Italian artist Giuseppe Penone. But the Palazzo is not a gallery. Since 2015, it has been the headquarters of Fendi, the fashion brand. Fendi chief executive Pietro Beccari says artists must be free to work “without interference. Once you make the choice to choose one artist rather than the other, you have to go for it, otherwise you lose authenticity.”It is therefore vital, he adds, for companies to choose carefully artists who are [...]

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The challenges facing France’s luxury market

France was the world’s sixth largest economy in US$ terms in 2016 and its luxury goods market currently stands at number four in the world reaching just over US$22 billion behind the US, China and Japan. Although it avoided recession in the 2011-2016 period, its economic performance was anaemic and its luxury market is facing a number of headwinds. From November 2015 France was plagued by terrorist attacks, with incidents in Paris, Nice and other parts of the country shaking consumer confidence and deterring international visitor. The social context was also [...]

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U.S. department stores restructure business model

According to commercial real estate experts Cushman & Wakefield, across all sectors, 9,000 to 10,000 shops are expected to close down in 2017 in the USA, with another 13,000 closures forecast for 2018. The hardest-hit segment is that of department stores. They are struggling to adapt to changing consumer habits, and many of them are forced to streamline their organisations to stay afloat, further compounding their woes. Macy’s too has engaged in an aggressive store-closure policy, with a view to save up to $600 million in costs. The department store, [...]

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