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.

Reuters November 19, 2020 00:08:50 IST
Global luxury goods sales set for largest ever fall in Bain forecast

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.

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.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Global Markets: Stocks ascend to record on economic recovery, vaccine outlook
Business

Global Markets: Stocks ascend to record on economic recovery, vaccine outlook

By Chuck Mikolajczak NEW YORK (Reuters) - A gauge of global stocks hit a record and oil prices jumped on Monday as the newest positive data for a potential COVID-19 vaccine and signs of economic recovery in Asia boosted sentiment. U.S. stocks advanced, with the Dow Industrials setting a record as it neared the 30,000 mark for the first time, after pharma company Moderna said its prospective vaccine was 94.5% effective in preventing the illness, which has crushed economies across the globe

Airbnb IPO filing shows third-quarter earnings beating virus with cost cuts, new focus
Business

Airbnb IPO filing shows third-quarter earnings beating virus with cost cuts, new focus

By Anirban Sen and Joshua Franklin (Reuters) - Airbnb Inc's initial public offering (IPO) registration showed on Monday that the home rental startup turned a profit in the third quarter despite the COVID-19 pandemic, as it gears up for one of the most anticipated stock market debuts in recent years. The filing, published ahead of Airbnb's anticipated stock market debut in December, showed a dramatic recovery in its fortunes, after the coronavirus outbreak dragged down its core home rental business during the first half of the year. The slump forced it to lay off 25% of its workforce in May, suspend marketing activities for the year and seek $2 billion (£1.5 billion) emergency funding from investors, including Silver Lake and Sixth Street Partners, at a valuation of $18 billion

Biden says U.S., allies need to set global trade rules to counter China's influence
Business

Biden says U.S., allies need to set global trade rules to counter China's influence

By David Lawder WASHINGTON (Reuters) - U.S. President-elect Joe Biden said on Monday the United States needed to negotiate with allies to set global trading rules to counter China's growing influence but declined to say whether he would join a new China-backed Asian trade pact signed on Sunday.