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.
Image credit: brandchannel.com
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