SPENDING on luxury goods this year is expected to top last year’s sales, with growth in the Americas overtaking that of China, a worldwide study revealed yesterday.
In a reversal of the trend in recent years, spending on luxuries in the Americas is expected to grow four per cent this year, as opposed to 2.5 per cent for China. Ironically, one of the factors driving sales growth in the Americas is tourist spending from the increasing number of Chinese visiting cities like Los Angeles and Las Vegas.
The study, from consultancy Bain & Company, said worldwide sales of personal luxury goods would rise six per cent at constant exchange rates in 2013, higher than the four to five per cent it had forecast in May and the five per cent rise seen in 2012.
However, the growth rate would be only two per cent, reaching €217bn (£185bn), at current exchange rates, with the devaluation of the yen responsible for over half of that gap.
“The hypergrowth of recent years was destined to moderate,” said study author Claudia D’Arpizio. “The silver lining for luxury brands is that they can now change their focus from keeping up with the present to planning for the future.”
Europe is expected to see two per cent growth this year with increasing tourist spending propping up slower sales to locals. In Britain 55 per cent of luxury goods sales are to tourists.
But while Europe’s growth is lower than that of other continents, it still leads the revenue chart, with sales of €74bn, compared to €69bn in the Americas and €46bn in Asia (excluding Japan). Japan saw nine per cent growth in real terms, which translated to a 12 per cent decline because of the depreciation of the yen.
Online sales are a major boost for the market, with growth up 28 per cent for the year to nearly €10bn – five per cent of total sales and larger than the total luxury revenue for Germany.
Accessories, including leather goods and shoes, are top sellers, making up 28 per cent of revenues, while apparel accounts for a quarter of sales.