Confidence Boost in the Global Luxury Market

The robust sales of luxury products around the world is sending positive signals about the health of the economy.
Confidence Boost in the Global Luxury Market
A man carries a Valentino bag as he exits the designer shop in downtown Beirut. Global luxury goods sales have rebounded since the financial crisis, especially in Asia. (Joseph Eid/AFP/Getty Images )
8/1/2010
Updated:
10/1/2015
The robust sales of luxury products around the world is sending positive signals about the health of the economy and the recovery from the global financial crisis.

<a><img src="https://www.theepochtimes.com/assets/uploads/2015/09/valentino-bag93435063.jpg" alt="A man carries a Valentino bag as he exits the designer shop in downtown Beirut. Global luxury goods sales have rebounded since the financial crisis, especially in Asia. (Joseph Eid/AFP/Getty Images )" title="A man carries a Valentino bag as he exits the designer shop in downtown Beirut. Global luxury goods sales have rebounded since the financial crisis, especially in Asia. (Joseph Eid/AFP/Getty Images )" width="320" class="size-medium wp-image-1816742"/></a>
A man carries a Valentino bag as he exits the designer shop in downtown Beirut. Global luxury goods sales have rebounded since the financial crisis, especially in Asia. (Joseph Eid/AFP/Getty Images )
Retail-to-luxury conglomerate PPR SA announced its net profit in the first half of 2010 to have increased more than 100 percent, with robust consumer spending internationally. The owner of Yves Saint Laurent, Gucci, sportswear Puma, and French retailers Conforama and Fnac brands said that net profit in the six months through June rose $526 million from $247 million in the same period a year ago.

“Sales growth gained further momentum in the second quarter, fueled by the success of our brands and retail concepts on the Web and in international markets, where we are durably strengthening our positions,” CEO Francois-Henri Pinault said in a statement.

The world’s largest luxury goods company, France’s Moet Hennessy-Louis Vuitton (LVMH), also reported a 53 percent rise in net profit to $1.37 billion, exceeding expectations.

Another high-end French brand name in the luxury and fashion business, Hermes, also announced a 22.8 percent rise in sales.

While luxury goods sales slumped 8 percent overall last year, Burberry and luxury sunglasses and watch firm Luxottica are experiencing escalating orders this year.

Remy Cointreau champagne and cognac group have recovered in the first quarter of 2010, with sales up 21.3 percent against a drop of 7.5 percent in 2009. And bottles of Laurent Perrier champagne are gaining the ground they lost during the economic downturn.

In Switzerland, watch exports increased 35 percent in June, primarily due to a 40 percent spike in demand of high-end watches.

The Asian market for luxury goods has been the main source for the positive figures. Hermes saw 45 percent sales to Asia, excluding Japan, while Burberry sold 43 percent of its goods to Asian buyers, excluding Japan as well.

The United States and Europe also contributed to the revival of the luxury market, with LVMH reporting an 18 percent sales gain in the U.S. and 11 percent in Europe.

However for the Europeans, sales figures seemed markedly improve mainly due to the euro’s currency depreciation, hence prompting the return of Asian and U.S. tourists and new demand from European buyers, analysts said.

“There is continual sustained interest from China and the demand is for Europe-crafted goods, with luxury outlets opening constantly,” said another analyst according to AFP.

“In the U.S. last year it was not the done thing to buy luxury goods, it went against the grain to show off your money. Now a psychological barrier has been overcome.”