Driven by declines in established markets, consultant Bain & Co. predicts 2009 global luxury sales will drop 8% to US$227 billion. That's a slight improvement over their most recent estimate of a 10% decline.
The U.S. market will witness the greatest decline, with revenue expected to drop 12%. Even with the drop, the region will still be responsible for 29% of worldwide luxury sales. Bain predicts a 10% drop in Japan and 8% in Europe. Europe will remain the largest luxury market, responsible for 38% of global sales. Japan will have 12% market share.
China remains a bright spot, with revenue expected to rise 12% in 2009. Chinese spending on luxury products is expected to reach €6.6 billion in 2009. That compares to €59 billion in Europe, €44 billion in the U.S. and €19 billion in Japan.
Bain believes the luxury industry's larger players will weather the recession better than small players. "There are many, many small and medium companies that don't have the financial and managerial muscle to react the more competitive and more difficult market, like this one is becoming," B said.
LBN Comment: Bain has modified their
estimate several times. In November 2008, href="http://www.luxurybrandnetwork.com/public/253.cfm">LBN first reported that Bain was predicted 3% growth for 2009. They subsequently settled
on a 10% decline and finally changed that now to 8%.
(Posted 3 Nov 2009)