Monday, 19 April 2010

Bain & Co. Says Wealthy Shoppers Are Spending Again – 19/4/10

According to research by U.S. consultancy Bain & Co, wealthy spenders are not just window shopping, they’re actually buying, which has resulted in an increased forecast of "global luxury sales by more than 4 percent this year."

Given global luxury sales were down by 8 percent in 2009 vs. the previous year, it still means that sales are forecast to be -4 percent vs. 2008, so there’s still some work to be done in our book. Fortunately, luxury good houses have the continued development of China and strong sales in Asia to thank, in addition to the strength of the other emerging parts of the ‘BRIC acronym’, namely Brazil, Russia and India.

In this study (as discussed by Reuters), "Bain predicted strong brands would benefit most from the upturn and weak brands suffering from cash problems would have to look for buyers or risk bankruptcy.”

Another key finding was that: "This polarization creates fertile conditions for market concentration. As mega-brands capture more market share, 2010 is likely to be a year when the search for capital triggers M&A and IPOs, and continued challenging conditions for lagging brands create ongoing risk for failures and bankruptcies." We agree with this. Click here for our earlier thoughts on the current status and possible future of luxury mergers and acquisitions.

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,