The Luxury Goods Market has continued to grow throughout the economic downturn, particularly jewellery and watches. However, the European market has under-performed compared to elsewhere in the world. Interestingly, the European market has held up largely because of purchases by tourists, especially Chinese tourists. Meanwhile mainstream fashion is a tougher environment, still heavily price driven and consumers are no longer replacing their clothing or accessories as frequently as they did five years ago.
As companies struggle to emerge from the deepest recession in Europe since the 1930s, companies involved in the Fashion & Luxury Goods sector will need to find new ways to appeal to prospective customers. In jewellery, the distribution channels are now much more diverse. Most jewellers have to cope with issues such as more demanding consumers, competition from non-specialists, internet sellers and tougher restrictions on distribution policy from branded suppliers. In order to differentiate, jewellers continually seek new sources to develop their own exclusive collections. A growing number of consumers are searching for meaning in what they buy – be it more responsible consumption or other personal intrinsic value in the product that only they can identify with. Some companies are looking beyond the young fashion towards an older age group.
Italy continues to be the leading European market for fashion and luxury goods, some 20% bigger than France and around double the size of the equivalent markets in the UK and Germany. However, the leading fashion houses face increasingly stiff competition from imports, especially from India, China and Thailand.
The figure indicates that imports of the key Fashion & Luxury product groups in Italy have increased by over 50% over the past decade from €17 billion to over €26 billion.
Meanwhile average growth rates in consumption for e.g. gold jewellery outperformed the European average in most of the new Member States of Eastern Europe.
