Bain & Co Predicts 4% Expansion of Global
Luxury Goods Market in 2010
Continuing Growth in Asia (excluding Japan) and Returning Consumer Confidence Spark Rebound and
Optimism; Study Shows Megabrands Weathered Recession Best
April 22, 2010 07:03 AM Eastern Daylight Time
MILAN--(EON: Enhanced Online News)--Building on strong momentum from a healthy 2009 holiday shopping
season, global luxury goods industry revenues will increase 4% (using constant exchange rates) from 153 million euro
in 2009 to a projected 158 million euro for 2010; this according to the newly-released Spring 2010 update of Bain
& Company’s ‘Luxury Goods Worldwide Market Study.’
The positive outlook for 2010 is a sharp reversal from the year-over-year 8% decline in revenues that the global
luxury goods industry experienced in 2009. Bain estimates that the projected full-year increase of 4% will result from
a particularly strong growth spurt of 5-10% in the first half of the year, followed by a second half increase of zero to
five percent. Strong like-for-like revenue growth in luxury retail stores ranging from 15% -20%, strengthening
fundamentals in GDP globally, a return to international travel and a resurgence in consumer confidence have all
converged to create a positive climate for growth.
“The most important lesson from the economic crisis is that bigger brands were better equipped to weather and
respond,” said Claudia D’Arpizio, a Bain partner in Milan and lead Bain author of the study. Only 2% of the 220
brands studied saw growth over 5% in 2009, accounting for 10% of the overall market. Brands that declined by
more than 15% accounted for half of the brands studied, yet realized only 20% of overall sales. “This polarization
creates fertile conditions for market concentration,” added D’Arpizio. “As megabrands capture more market share,
2010 is likely to be a year when the search for capital triggers more luxury M&A and IPOs.”
This year's luxury rebound is lifting all of the sector’s core product categories. Apparel and watches/jewelry are
forecast to grow 4% for the year, with accessories, shoes and leather to increase 5%. Perfume and cosmetics are
forecast to grow at 2% for 2010. “We see the temporary phenomena of ‘luxury shame’ fading in mature markets,
with luxury appeal returning amongst loyal customers,” added D’Arpizio.
Looking across geographies, China and Asia (excluding Japan) continue to drive growth for the global industry, with
15% and 10% forecasted growth respectively. For the Americas, 4% growth is forecast, and 3% for Europe, a
critical turnaround in luxury’s core market regions. Only Japan will see further decline, by 3% versus 2009.
"The new forecast is quite encouraging” said Santo Versace, Chairman of Fondazione Altagamma, the flagship trade
association for the Italian luxury goods industry. “In the midst of the worst crisis to hit the sector, luxury
manufacturers have shown an excellent reactive capacity, recovering faster and better than many other industries.
The business challenges brought on by the ‘Great Recession’ actually propelled high-end luxury companies to focus
deeply on their customers, concentrate on their core business, and elevate their product design and innovation to a
“After three punishing quarters, shoppers started coming back into the stores, and better yet, they are once again
buying,” said Bain’s D’Arpizio. “A resumption of luxury goods purchasing has allowed retailers to work through their
inventories. Destocking is over. The luxury goods market is once again poised for growth.”
To request a copy of Bain’s updated Luxury Goods Worldwide Market study or to schedule an interview with
Claudia D’Arpizio, please contact Cheryl Krauss at email: email@example.com or +1 646-562-7863, or Frank
Pinto at email: firstname.lastname@example.org or +1 917-309-1065.
About the Bain ‘Luxury Goods Worldwide Market’ Study
Bain & Company, in cooperation with Fondazione Altagamma – the flagship trade association for the Italian luxury
goods industry – has analyzed the market and financial performance of 200 of the world’s leading luxury goods
companies and brands. The database of companies, known as the ‘Luxury Goods Worldwide Market
Observatory’, has become a leading and much studied source for the international luxury goods industry. Bain
publishes its annual findings in its ‘Luxury Goods Worldwide Market’ study, which was first published in 2000.
About Bain & Company, Inc.
Bain & Company, a leading global business consulting firm, serves clients on issues of strategy, operations,
technology, organization and mergers and acquisitions. The firm was founded in 1973 on the principle that Bain
consultants must measure their success by their clients' financial results. Bain clients have outperformed the stock
market 4 to 1. With 42 offices in 27 countries, Bain has worked with over 4,150 major multinational, private equity
and other corporations across every economic sector. For more information visit: www.bain.com.
Bain & Company
Cheryl Krauss, +1 646-562-7863