Luxury Goods Market Set for Rebound

RAPAPORT... The personal luxury-goods industry will bounce back in 2021 amid increased spending from the US and China on shoes, leather items and jewelry, according to Bain & Company.Global sales of personal luxury goods will grow 29% year on year to EUR 283 billion ($324.01 billion), the consultancy company said in its Fall 2021 Luxury Report, released last week in conjunction with Altagamma, an Italian industry group for luxury-goods manufacturers. Sales will rise 1% versus 2019 levels at current exchange rates and 4% at constant exchange rates.The jewelry category will grow 24% year on year and 7% relative to 2019, as branded luxury takes off in traditional non-core markets, the desire for unisex jewelry rises, and e-commerce sales grow, Bain noted. "Driving this growth is remarkable momentum in China, where the market size has doubled since 2019, as well as solid growth in the US, where a new map of luxury is fast emerging, with increased importance of secondary cities and suburban areas," the company explained.The Americas is now the largest global market for luxury, representing 31% of the total, or EUR 89 billion ($101.9 billion), while China makes up 21%, or EUR 60 billion ($68.69 billion). Meanwhile, Europe, Japan and the rest of Asia have recovered only partially this year and have yet to reach pre-Covid-19 levels, as travel remains lower than before the pandemic.Bain expects the personal luxury-goods market to grow to between EUR 360 billion and EUR 380 billion ($412.17 billion and $435.06 billion) by 2025, it said. The outlook comes despite some uncertainty over the next holiday season, including a possible softening in China due to falling consumer confidence and potential further lockdowns, and the winding down of US public-relief programs."It's interesting to think about where the industry might be in 20 years from now," said Federica Levato, a partner at Bain and co-author of the report. "It's likely that the crisis will mark a turning point for luxury as we knew it - luxury brands will continue to redefine themselves, expanding their mission beyond creativity and excellence, becoming enablers of social and cultural change."Image: A woman wearing luxury jewelry. (Shutterstock)