Serbia’s luxury market shows signs of recovery
In the first three months of 2011, sales of luxury goods in Serbia have shown slight improvements, compared to the same period last year. Fashion and accessories sales grew by 5% and fragrances & cosmetics by 7%. Jewellery/watches, auto and travel remain among the sectors still in red, with signs of a partial recovery towards the end of the year. Multibrand stores have outperformed mono brand, franchised stores. Market new entrants (2010) Burberry has met expectations, while Emporio Armani is below initial expectations. As for luxury hospitality, the Belgrade market saw the addition of the second five star hotel (Square Nine), after the Hyatt Regency opened more than 10 years ago. Unfortunately, the announced luxury hospitality projects such as InterContinental, Kempinski and Hilton are likely to suffer more delays, with a new five star unlikely to open before 2013.
Serbia’s luxury market has been affected not only by the international financial crisis, but also by the current political turmoil, with upcoming elections, thefore, key fiscal reforms being postponed as well as the increase in number of wealthy Serbians buying abroad, thanks to cheaper flying and travel costs.
While getting closer to EU integration seems to be 2 to 3 years away, the special relationship with Russia, Serbia’s key traditional trade partner has seen a boost with an official visit by Russian PM Vladimir Putin. Although on the agenda, the main topics concerned energy, Serbia is reported to have obtained financing of 1 billion euros from Russia for various projects. This can only translate, at a later stage, into a faster recovery of the economy.
On September 26th 2011,CPP will organize in Belgrade the annual edition of BUSINESS OF LUXURY FORUM and with the occasion, will present the comprehensive luxury market report as well as announce the upcoming major luxury fashion brand openings late 2012.