Global luxury goods sales set for largest ever fall in Bain forecast
MILAN (Reuters) - Sales of luxury goods worldwide are set to fall by 23% to 217 billion euros (194.06 billion pounds) this year, their largest ever drop and first since 2009, due to the fallout from the coronavirus pandemic, consultancy Bain said on Wednesday. The expected decline, despite a strong sales recovery in China, is at the lower end of a 20% to 35% range which Bain's closely followed industry forecast had predicted in May.
MILAN (Reuters) - Sales of luxury goods worldwide are set to fall by 23% to 217 billion euros (194.06 billion pounds) this year, their largest ever drop and first since 2009, due to the fallout from the coronavirus pandemic, consultancy Bain said on Wednesday.
The expected decline, despite a strong sales recovery in China, is at the lower end of a 20% to 35% range which Bain's closely followed industry forecast had predicted in May.
That is due to a bigger than expected rebound during the summer, when lockdown measures were lifted or eased across the world and stores selling high-end handbags, clothes, jewellery and watches were reopened.
However, a resurgence of the pandemic in Europe and the United States since October has led to new restrictions and shop closures while uncertainty linked to the U.S. elections also weighed on consumer sentiment.
The only bright spot is China, where sales have surged since it began to emerge from the health crisis in the spring. Sales in mainland China are seen growing by 45% at current exchange rates to 44 billion euros this year.
"We have a two-speed world, with Europe and the U.S. strongly hit by the second wave and by social and political uncertainty, while China is relentlessly accelerating day after day," Federica Levato, a partner at Bain, said.
Fourth-quarter sales are expected to drop by 10%, although the decline could be bigger depending on how much the new shutdowns hit the crucial Christmas season.
Revenues for the likes of Louis Vuitton owner LVMH, Hermes and Prada should partly recover in 2021, although Bain says it will take until the end of 2022 or even 2023 to return to 2019 levels.
The coronavirus crisis has accelerated three trends, Bain said, with purchases online almost doubling from 12% in 2019 to 23% in 2020, and e-commerce set to become the leading channel for luxury purchases by 2025.
International travel curbs have led to people buying more in their home countries, while shoppers born from 1981 onwards now account for almost 60% of total purchases.
(Reporting by Silvia Aloisi and Claudia Cristoferi; Editing by Alexander Smith)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.