The global luxury market has cruised — and sailed and flown and driven — to more than $1 trillion in sales this year, according to a new report from Bain & Co. At a constant exchange rate, that represents an increase of 5 percent over last year, fueled by sales of luxury cars, stays at high-end hotels and purchases of fine art, after growth of 7 percent from 2013 to 2014.
The outlook for sales at the high end of the market in 2016 is slightly less luxe, though, as lackluster economies in China and Russia and the strength of the U.S. dollar take their toll, Bain analyst Claudia D’Arpizio predicts.
Global sales of personal luxury items such as leather goods, jewelry, watches and fashion are expected to grow about 1 to 2 percent at constant exchange rates, reaching €253 billion (roughly $268 billion) this year, D’Arpizio writes in Bain’s 14th annual "Luxury Goods Worldwide Market Monitor." Chinese consumers accounted for the largest share of luxury purchases, 31 percent, but Americans were close behind, with nearly a quarter.
"For the last several years, we've referenced ‘luxury's new normal' with a deceleration of the personal luxury goods market. Now, we are starting to feel the impact of that slowdown," D'Arpizio, a Bain partner in Milan, said in a statement previewing the report. "The challenge for luxury brands in this environment is how to successfully navigate through hard-to-predict volatility."
The strength of the dollar hurt the U.S. luxury market. “The ‘super dollar’ was too expensive for many global tourists,” according to Bain, “and though local consumption is growing, it was barely sufficient to offset the lost tourism revenue.” Even so, the U.S. remains the world’s biggest luxury market. New York City alone outweighed all of Japan, according to Bain.
If you’re looking to defy the global slowdown or give an extra boost to the overall luxury industry, you may want to peruse these 18 luxury gifts for the super rich.