Luxury sales growth to slow down in 2011
U.S. consultancy Bain & Co predicts growth in the luxury sector will slow next year to 3-5 percent after a 10 percent rebound in 2010, sending down the shares of several major European luxury stocks.
Bain on Monday said it expected growth in the luxury sector to slow down as the basis for comparison became higher and currency fluctuations could hamper tourist flows.
The luxury goods industry, which suffered its worst slump in 2009 with an 8 percent drop in global sales, has been catching up lost ground up at a faster pace than expected. Bain predicted back in April that global luxury sales would grow only 4 percent in 2010.
But the U.S. rebound, coupled with luxury brands expanding at break-neck speed in China and the weak euro attracting tourist shoppers in Europe, means global sales are now expected to grow 10% to 168 billion euros this year.
China remains the fastest-growing luxury market with sales expected to rise 30 percent this year, while crisis-hit Japan will start to recover only next year, the study showed. Sales in Europe, whose luxury brands account for around 75 percent of the global market, are seen up 6 percent this year, fuelled by shoppers from emerging markets.
The United States, where sales fell 15 percent in 2009 hit by discounts at department stores, are set to be 7 percent higher this year, or 12 percent at constant foreign exchange rates.