Slower growth for luxury goods in 2014
Sales of luxury goods are expected to grow more slowly in 2014 compared with last year as weakness in China,Russia and Europe counters rising global tourist shopping and strong demand in Japan and the United States, a study said on Monday.
Worldwide sales of personal luxury goods are set to rise 4-6 percent this year at constant exchange rates compared with a 6.5 percent increase in 2013, Bain & Co said in the study presented with Italian luxury industry association Altagamma.
Currency volatility wiped 3-4 percent off the value of the market in the first quarter, the study said, as the euro – in which many of the world’s luxury companies report earnings - appreciated against the U.S. dollar, renminbi, and the yen.
While travel retail, outlet stores and online shops are expected to perform well as people travel more and search for bargains, new shop openings are expected to slow in 2014 as brands seek to maintain exclusivity.
Japan will be the main growth driver in 2014, with luxury sales rising 9-11 percent to 19-20 billion euros, as both Japanese shoppers and Chinese tourists take advantage of the weaker yen, but this could be affected by brands hiking prices.
The Russian market is showing signs of a potential structural crisis as political turbulence worsens an already deteriorating economic outlook, the study said, forecasting a 4-6 percent drop in luxury sales there this year.
Russians, traditionally the most important nationality among foreign luxury shoppers in Italy, are travelling less to Europe due both to the political crisis and a weakening ruble.