The luxury goods market should pick up in 2017, aided by resurgent demand in the United States and China, after hitting a low this year, according to business consultancy Bain & Co. The approximate $285 billion luxury industry is likely to see sales growth this year of around 1% at constant exchange rates compared with 1.5% in 2015. "I think this year could be a low point for the industry," Claudia d'Arpizio, a Bain partner and lead author of studies on the luxury sector, told Reuters on the fringes of the New York Times International luxury conference in Versailles, outside Paris.
Bain is due to release in a few weeks its updated study and forecasts for the luxury goods market, which includes accessories, clothing, jewelry and watches, and has not yet published any figures to show its latest thinking on the outlook. In recent weeks there has been a spate of negative news on the luxury sector but Bain is among the first to quantify an expected deterioration in trading conditions this year, according to the report.
It said customers were adopting a wait-and-see attitude in the U.S. market, which meant demand was expected to revive next year once the presidential election was over. The strength of the dollar has also been holding back tourist shoppers. It also expected demand in mainland China to improve as price differences narrow with regions such as Europe and China's new tax measures and border controls help discourage overseas purchases. Bain predicted annual growth in the personal luxury goods industry of 2-3% through the next five years.