MILAN (AP) — Global sales of luxury goods are off to a slow start in 2013 and aren't expected to match the double-digit growth of the last three years, consultancy Bain & Co. said in a study released Thursday.
Sales of luxury apparel, accessories, jewelry, cosmetics and art are expected to grow just 4 percent to 5 percent in 2013, to between 220 billion euros and 222 billion euros ($283 billion to $286 billion). They increased 10 percent in 2012, to 212 billion euros ($272 billion).
Sales will reach about 250 billion euros by 2015 and 500 billion euros by 2025, according to Bain's study, which was commissioned by Italy's luxury producers' trade association, Altagamma.
Demand this year will be sustained mainly by young people who have high incomes but are not yet wealthy. Though they spend less than those with established fortunes, they are ten times more numerous, said Bain partner and study author Claudia D'Arpizio.
Particularly in China and the United States, young people are showing strong earning prospects and interest in spending on accessible luxury items, she said.
The story is somewhat different in Europe, where youth unemployment is rampant, and Japan, where "young people are less interested in luxury. They have their own tastes and are very creative," D'Arpizio said.
Europe, where recession has deepened, is forecast to have flat sales this year. Tourists who traditionally spend on luxury goods while in Europe, helping the market there continue to grow despite the slowdown, are becoming cautious. The Japanese are traveling less due to a sharp drop in their home currency and the Chinese are buying less abroad as brands narrow price gaps, D'Arpizio said. At the same time, local consumer spending has not yet recovered and price increases are discouraging shoppers.
Europe remains the biggest single luxury market, but it saw its overall share shrink to 35 percent in 2012 from 27 percent the year before.
The United States, the second largest market, is enjoying a period of improved consumer confidence and higher tourist traffic, according to the study. The market is expected to grow by 5 percent to 7 percent this year.
China also has backed off from double digit growth and is slowing to a more sustainable 6 percent to 8 percent this year.