By Andy Sambidge
Worldwide survey reveals region is one of few markets poised to show growth in 2009.
The Middle East region is predicted to buck a major slump in the global luxury goods market in 2009, according to a new report published on Wednesday.
Bain & Company's update to its Luxury Goods Worldwide Market study - published in response to the sharp deterioration of the global economy since October 2008 - shows the region as one of the few growth areas.
The report says the luxury sector faces between a decline in sales revenues of up to 20 percent during the first two quarters in 2009.
Bain estimates that the worldwide luxury market will only begin stabilising in the second half of the year, resulting in a net decline of 10 percent for 2009 overall.
But the report says smaller luxury markets will fare better with the Middle East predicted to grow two percent and China seven percent.
"This year's declines are hitting both the top and bottom lines of luxury goods companies," said the study's author Claudia D'Arpizio, a Bain partner and luxury goods expert based in Milan.
"Luxury shoppers are spending less, traveling less and feeling less confident. Luxury goods producers are also feeling the additional squeeze of intense pricing pressure and markdowns from retailers and higher-end department stores."
Among the major luxury product categories, apparel will be hit the hardest, declining by 15 percent, according to the report.
Jewellery and watches are seen declining by 12 percent, while leather goods, shoes and accessories are set to decline by 10 percent.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Its surprising that this Report states that Luxury Retail is going to post a growth in the Middle East. I for one in the past have worked for several Luxury Retailers in the UAE and their Sales are 40% down year on year... Companies like AL Futtaim, Saks Fifth Avenue, Chaloub, Damas, Bin Hendi ahve all cut back on their workforce, downsized expansion plans, forzen recruitment and closed stores. So growth in this secor is possible? With consumers leaving the economy, populaiton staled to fall by 15% this year, how is Retial sector - Luxury or otherwise slated for Growth? Do not fool people with misleading Reports... I for one know several Retailers who are bleeding right now and are way below Business Plan... Sales will fall 30% YOY...