Luxury Goods Sales Projected to Recover to 2019 Levels This Year
A new report published in May says that global sales of luxury goods have a shot at fully recovering to 2019 levels this year. Consultancy firm Bain & Company believes there’s a 30% probability that the luxury market could meet or exceed $340 billion in sales of high-end items such as apparel, handbags and jewelry, which would be the most in two years.
This marks an adjustment up from Bain’s prior forecast of a full recovery by 2022 or 2023. What’s changed, the Boston-based group says, is China and the United States’ unexpectedly strong economic rebounds, thanks in large part to swift vaccine distribution.
Some may question Bain’s optimism. After all, the luxury goods market saw its biggest annual decline on record in 2020, falling 23% due to pandemic-related lockdowns and financial uncertainty.
But a recovery has already begun. The French luxury giant LVMH Moet Hennessy Louis Vuitton announced in April that it had returned to growth in the first quarter, with $16.75 billion in sales across its more than 70 brands. Fashion and leather goods in particular had an excellent start to the year, generating record revenue of $6.7 billion, or 37% higher than the same period in 2019.
Like Bain, I’m very bullish and believe that U.S. and Chinese consumers are well-positioned to maintain this momentum. Vaccines continue to be administered, though at a slightly slower pace than before, while stimulus checks helped U.S. disposable incomes jump an unheard-of 29% in March compared to the same month last year. Over $17 trillion sit in U.S. commercial banks at a time when consumer confidence has climbed to its highest level since soon before the pandemic.