Boosted by demand in Asia, luxury goods market makes impressive take-off. - Market analysts have underlined the fact that although stock market values have only risen by 9% since the beginning of 2010, major luxury goods labels quoted in the Dow Jones index rose by 33% over the same period. Despite the crisis, the luxury goods sector remains attractive, has a good profile and growth potential of between 7% and 8% in 2011, which is particularly due to rising living standards for consumers in emerging countries. Chinese tourists alone account for 30% of Burberry sales in London, where its traditional customer base is coming back on course after last year's slowdown. Luxury goods is also one of the areas in which the strength of known labels is putting a brake on the market entry of new rivals and allows market leaders to increase prices, as Vuitton and Chanel have recently done. This also applies to “high range” consumers who are obviously more likely to spend than “medium-range” consumers. The biggest rises in luxury label values since 1 January 2010 are: 1) Hugo Boss (+100%); 2) Burberry (+68%); 3) Hermès (+62%); 4) Richemont (+54%); 5) LVMH (+48%); 6) Estée Lauder (+48%) and 7) Swatch (+45%). Bain & Company consultants have indicated that the global luxury goods market has recovered from the crisis and is expected to grow by 10% this year, mainly because of Asia. The company has sharply revised upwards its previous forecast of 4% growth. After having experienced a decline of -8% last year to a figure of $153 billion, Bain & Company is forecasting 10% growth in 2010, to a figure of $168 billion. This study was carried out in collaboration with the Fondation Altagamma, which covers all the main Italian luxury labels. In 2011, luxury goods are expected to continue to grow at a rate of between 3% and 5%, according to Bain & Company. Asia is the driving force behind this growth and after reaching a level of 10% growth in 2009, luxury goods in Asia are expected to grow by 22% this year. China is still the main market for the region, with a 30% growth rate this year, following its 20% growth rate in 2009. In the next five years, it is expected to supersede Japan as the main luxury goods market in the world. The US is expected to experience a growth rate of 12%, while the rate of growth in Europe will be 6%. In Japan, however, there is expected to be another decline of -8%. Increases in the value of the yen and dollar also played a major role in increased market values. In the context of products, companies specialising in leather accessories will be the main beneficiaries of this recovery, with a growth rate of 20%, whilst the luxury footwear sector is expected to increase by 16%. The luxury watches and jewellery sector is due to increase by 13%, clothing by 8% and perfumes and cosmetics in this sector, by 4%. Due to this recovery being more robust than expected, companies producing luxury goods recently announced a sharp rise in their profits. The French world leader LVMH, recorded a rise of +23.6% in its third-quarter turnover, whilst the Italian firm Prada, which has just been floated on the Hong Kong stock exchange, has indicated that Asia is now an essential market for this sector and in the first half of the year the company experienced high sales rate increases of 29.4%. According to Bain, one of the major challenges in this sector over the next two years will be to benefit from the “enormous potential” in China, with an appropriate strategy and “dedicated collections”. (I.L./transl.fl)