What is the long-term growth potential of luxury goods?

The luxury industry has entered a phase of consolidation. Luxury goods companies have to rethink strategies as the implosion of the gift-giving bubble, the store openings euphoria, and shifting consumption patterns have led to an increasingly competitive landscape.

Nevertheless, major luxury goods companies should benefit from the relative strength of their balance sheets. Companies in the sector recovered sharply from the crisis, with demand fuelled by a booming Chinese appetite who became the largest luxury customers, representing more than 30% of purchases, versus about 1% in 2001. Why now is the time to back Burberry However, the music stopped in 2012 with the Chinese crackdown on gift giving. This phenomenon was exacerbated by various adverse events and new consumption patterns. The industry has not yet fully recovered and some specia...