Experts Tone Down Forecasts For Luxury Goods Sector
MILAN--Some of the bling bling luster that saved the luxury sector from the financial crisis is starting to wane.
Sales growth of luxury goods - which encompasses everything from fine French champagne to diamond-encrusted Swiss-made watches - should rise to single digits for the second consecutive year in 2014, said Bain & Company partner Claudia D'Arpizio, at a press conference in Milan.
In 2013, the world's luxury sector grew an estimated 6.5 percent at constant exchange to 217 billion euros compared to 212 billion euros in 2012. In 2014, D'Arpizio forecasts growth of between 4 to 6 percent. This modest growth phase is expected to last into the near term, she added.
"We are slightly more cautious," D'Arpizio added, noting that over the three-year period between 2009 to 2012, a surge in Chinese consumer trends helped fuel double-digit growth of luxury sector sales.
Since then, lackluster economic growth and unpopular government policies have hit Chinese consumer trends, while the devaluation of the Ruble and the Yen have led to slower purchasing trends of Russian and Japanese tourists in Europe.
"This [new growth] rate should be the norm," said D'Arpizio, who is the leader of Bain's Luxury Goods Vertical and a member of the firm's Global Consumer Products and Retail Practices.
The study, presented by Bain & Co. and Italy's Fondazione Altagamma, highlighted other ongoing trends for 2014, predicting a continued outperformance of mens wear sales, strong kids wear sales and a push towards no logo accessories and leather goods as consumers continue to focus more on quality rather than name brands.