Luxury Downturn Predicted To Continue
The slide in the luxury goods market is set to continue for a bit longer. That's the data to be gleaned from the semi-annual update to Bain's "Luxury Goods Worldwide Market" study. The study shows that the luxury goods market will experience a 15-20 percent decline during the first two quarters of 2009 down from 170 billion euros in 2008 to about 153 billion euros this year.
But the study does see the proverbial light at the end of the tunnel. It predicts that the luxury market will start to even out in the second half of the year ending up with a net decline of 10 percent for 2009 overall. Like other studies, this one looks to China and the Middle East for signs of hope, seeing a projected growth of seven percent in China and two percent in the Middle East.
Overall all luxury shoppers are feeling more tentative and spending less. Luxury, however, remains a stratified industry with several different types of spending behavior. The lower tier of luxury consumers switching to less expensive brands and the more affluent luxury shoppers switching their focus to the intrinsic quality of materials.
Reader Comments (Page 1 of 1)
BlogHog Apr 20th 2009 9:01PM
No, this story is false.
The markets will not rebound till 2011 and Lux spending will not return until 2012 or 13.
This whole story is just wrong as spending only spreads out AFTER recovery and we are in global markets now.
Phil Apr 20th 2009 10:05PM
i agree.
One step further... hopefully the declines will continue till people come to realize that some things just aren't worth the money. There's nothing glamorous about greed and developing countries trying to emulate it. Not while there are still people dying by the millions each year of disease and hunger. The difference between that knockoff bag and legitimate bag are very slight. About as slight as the difference between that downloaded mp3 and an original CD. When do we start to say enough is enough.
Andy Apr 20th 2009 10:24PM
Absolutely not. Lets take it to extremes them. Lets go back to living in mud huts and using outhouses. As a modern home and indoor plumbing are luxuries too.
Andy Apr 20th 2009 10:25PM
A lot of it will depend on what the tax picture will look like in 2011.
Phil Apr 20th 2009 10:42PM
Hopefully we'll be so taxed we wont want or be able to afford any of these things.
And, it depends on what constitutes a modern home. These days indoor plumbing isnt a luxury. Unless the house costs 30 or 40 million.
My point wasnt that there shouldn't be luxury items... instead i was asking how much do you need before you say .. ok, i have enough. How many $500 handbags, $1,000 shoes, $300 jeans, $50,000 or $100,000 cars do you need. Most of which is created on the backs of cheap labor, by some people who actually do live in huts or shacks.. and use the street gutter as the bathroom. The same backs of people who look at the West and wish they could afford even the knockoff imitation things. I dont know about you but im just tired of the greed that cause much of the problems that the world is experiencing right now. Look at your history... this is the greediest America has been... and it only took less than 40 years for it to happen.
RBC Apr 20th 2009 11:30PM
I agree with Phil 100%. Personally, I cut back on "luxury" items when I realized many fashion houses are manufacturing goods in China. These goods continue to carry exorbitant prices, yet the cost to make these items in China are a few dollars. Further, many lux brands manufactured in China are done so in the same plant as many affordable brands.
Andy Apr 20th 2009 11:35PM
Of course your comment was typed using a computer made in... China.
colin Apr 20th 2009 11:37PM
same here, i stopped buying Armani after i got a nice silk jacket and found a "made in china" tag in it.
John Apr 21st 2009 7:48PM
Read "How Luxury Lost Its Lustre" for a good discussion on this.