June 6, 2006
Report: Luxury Spending to Triple by 2010
Purchases of luxury items, including jewelry, clothing and handbags, are expected to triple during the next four years according to a research study released by consulting firm Bain & Co. this week.
Sales of luxury goods are expected to grow 6% a year worldwide through 2010, compared to the 2% average annual rise in the first half of the decade. The largest increase is expected in Asia, with predictions of a 9% annual increase.
The report predicted that companies focusing on a single brand, such as Tiffany & Co. and Chanel, will benefit more from the rise in luxury than companies with many different brands, such as LVMH, which will suffer from "brand bloat" that dilutes the power of each brand.
The report suggests that luxury companies work to retain their talented employees, more effectively collect and share data about their customers, and allocate resources wisely in order to benefit from the trend.