Industry Prediction: Luxury Sales Will Grow in 2011

Global sales of luxury goods will likely fall again in 2010 but return to growth in 2011, an industry expert said on Monday.
“The worst thing that can happen is that we have another year of negative growth in 2010 …

But I see it picking up definitely by 2011,” said Scilla Huang Sun, who runs a $30 million luxury fund for Julius Baer.

Speaking at the Reuters Global Luxury Summit, she forecast global sales of luxury goods would fall 5 percent to 10 percent this year but said suggestions the economic crisis meant the death of the luxury market were way off the mark.
“

I don’t think it’s dead because I think human nature will always be attracted to nice product and nice brands,” she said. “The question is when will it be back to the level we saw in 2007.”
Market valuations for European luxury goods companies, which stood at 12 to 16 times earnings in 2007, have been languishing at multiples of eight to 11 for several months now.
Huang Sun reckons stocks are cheap on a long-term basis.

“If you look at the long-term charts, where we are even after the (recent) rally, we are still nowhere compared to where we were in 2006, 2007,” she said.
The winners that emerge from the economic crisis will be “the big and beautiful brands, strong brands and well managed brands and the classic brands,” she said, offering Burberry as an

example

(Luxuo)

Can Luxury Survive in This Tough Economic Climate?

This is a question being asked by the Wall Street Journal.....what will happen to high-end stores? An example is online luxury retailer Net-A-Porter who has recently launched theoutnet.com, an outlet site. Outlet stores, which were once bypassed by some consumers are becoming popular among shoppers. Some designers are even dropping their prices, but other are adaptive and giving consumers what they want. Balenciaga has a new outlet store in Woodbury commons and Oscar de la Renta launched an outlet section on the company's website. And though designers were furious about steep markdowns at department stores late last year, consumers loved them. You can't really argue with what the customer wants. so, while consumers may not pay full price again, luxury can survive this economy, that is, if like everything and everyone else right now, it learns to adapt.