Your wealthy client invested well. They stuck to the financial plan you made together, and they have some cash left over. They want to splurge on a gift for a loved one. Where should they begin? Try showing them this guide.
Investors in the sector know that luxury is having a tough year.
The value of the personal luxury goods market is likely to dip by 2% to $382 billion in 2024, albeit amid long-term positive fundamentals, according to the latest edition of the Bain & Co. Luxury Study, released in collaboration with the Italian luxury goods body Fondazione Altagamma.
The study estimates that only about a third of luxury brands will see positive growth this year, down from two-thirds in 2023 — and many brands will suffer a drop in revenue.
Just this month, Burberry, a British luxury group, announced an operating loss of $101.5 million for the six months to September, compared with a profit of $275 million a year ago.
In New York, Saks Fifth Avenue said it would not mount a light show at its flagship store this holiday season — an annual event that is hugely popular with tourists and holiday shoppers. A store representative opined that this has been a challenging year for the luxury market.
“In this context, pressure on profitability is mounting, setting the scene for an increased focus on performance improvement and technology in 2025,” the study said.
Bain and Altagamma’s research found continued strength in Japan’s luxury market, solidity in southern Europe and a progressively improving trajectory in the U.S., but also rapid slowdown in China and challenging conditions in South Korea.
Globally, researchers identified the strongest category growth in beauty and eyewear. Jewelry was the most resilient core luxury category, but shoes and watches struggled.
Bain said longer-term market growth should be solid owing to anticipated increases in wealth and the luxury consumer base, but unlocking that growth will require clarity in strategy and execution. It said brands must rediscover their purpose and embrace these foundational pillars of the industry:
- Desirability fueled by craftsmanship, creativity, and distinctive brand values
- Meaningful, personalized and culturally resonant customer connections and experiences
- Tech-enabled flawless execution
See the gallery for 10 luxury gifts for women and men this holiday season.
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