World luxury goods sales growth seen up 2-4 pct amid high spending in Europe, China: Report

Global sales of personal luxury goods will grow by a stronger- than-expected 2-4 percent at constant exchange rates in 2017, as higher spending in Europe and China outpace weakness in the United States and southeast Asia, a report showed on May 29.

In 2017, total revenue in the sector that includes watches, jewelry, clothes, shoes and leather goods will rise to 254 billion-259 billion euros ($284 billion-$289.25 billion) from 249 billion euros in 2016, the study by consultancy group Bain & Co and Italian luxury industry association Altagamma showed.

The luxury goods sector has suffered in the past couple of years from fewer tourists coming to Europe after a wave of militant attacks on the continent, less business in Hong Kong and slowing demand in China.

In October, Bain had forecast 2017 growth of 1-2 percent for the luxury sector, but the industry managed to grow 4 percent year-on-year in the first quarter of 2017.

"After a difficult 2016, the first quarter of 2017 brought some relief to the luxury industry. The continuous repatriation of Chinese consumption as well as a positive outlook in Europe both for locals and tourists will help drive overall market growth during the remainder of the year," said Claudia D'Arpizio, Bain partner and lead author of the study.

Bain does not name specific companies, but in the first quarter of 2017 luxury giants LVMH, Kering and Hermes all posted strong results.

Bain partner Federica Levato, another of the authors of the report, told Reuters: "It's a healthier growth than before. So we have revised our market forecast for this year. Some players who are doing well are really outperforming."

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