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Luxury Goods Retailing - International - August 2015

Published By :

Mintel

Published Date : Aug 2015

Category :

Luxury Goods

No. of Pages : N/A

The concept of luxury goods is still highly subjective. It is usually obvious where a product is luxury and equally obvious where it isn’t, but there is a grey area that is more subjective. Take the Swatch group, for example. Swatch itself is clearly mass market and, while they are more upmarket, we think that Longines and Tissot are too. But Omega is a luxury brand, and one of the more desirable as well. Or look at Net-a-porter, in which Richemont has just sold a controlling interest to Yoox. Some of the brands are most definitely luxury brands (eg those from the Kering and Prada stables), but others are not. J Crew is a US mass market brand.

Introduction

Definitions
Report scope
Mintel market sizes
Defining luxury goods
Geographical breakdown
Technical notes
Financial definitions
Exchange rates
Figure 1: US Dollar to Euro annual average exchange rates, 2009-13
Abbreviations and terminology

Executive Summary

Market size and forecast
Figure 2: Luxury goods market size and forecast (excl. VAT), 2010-20
A regional view
Figure 3: Regional share of the luxury goods market, 2007-14
Figure 4: Top 10 countries in the luxury market, by sales, 2013-14
Segmentation by product
Figure 5: Luxury goods market split by product category, % share, 2010 and 2014
Market shares
Figure 6: Leading luxury brands: % share of all luxury sales, 2013 and 2014
The consumer: who buys luxury goods
Figure 7: Those who had bought luxury goods in the last 18 months, by country, May 2014 and April/May 2015
The consumer: where they buy
Figure 8: Where they bought luxury goods, by country, purchases made in-store in home country, April/May 2015
Figure 9: Where they bought luxury goods, by country, purchases made in-store abroad, April/May 2015
Luxury online
Figure 10: Percentage of luxury goods shoppers buying luxury goods online in the last 18 months, by type of retailer website, May 2015
The consumer: spending intentions
Figure 11: 2015 spending intentions, by country, April/May 2015
The consumer: attitudes to shopping online for luxury
Figure 12: Attitudes to shopping online, % that agree with the following statements, April/May 2015
What we think

Issues and Insights

What are the prospects for luxury online?
The facts
The implications
How can luxury brands leverage digital innovation?
The facts
The implications
The changing face of luxury
The facts
The implications
Has luxury gone ex-growth?
The facts
The implications

Market Size and Forecast

Key points
A difficult year
The market size
Outlook
Figure 13: Luxury goods market size and forecast (Excl VAT), 2010-20

Market Drivers

Key points
What are luxury goods?
The who, when, why and where of buying luxury goods
Wealthy individuals
Figure 14: Numbers and share of wealth of HNWIs, 2014
Growth in numbers
Figure 15: Number of HNWIs, 2003-14
Figure 16: Numbers of HNWIs, 2007-14
Figure 17: Wealth of HNWIs, 2008-14
Figure 18: Average wealth of HNWIs, 2003-14
Economic background
Figure 19: GDP growth in US dollars at current values, 2010-15
Figure 20: Leading international currency exchange rates, 2002-15
Stock markets
Figure 21: Leading stock markets year on year growth, 2010-14
Tourism
Figure 22: International inbound tourism, 2000-14

Luxury Market – A Regional View

Key points
Regional analysis
Market size by region
Figure 23: Luxury goods markets, 2010-14
Figure 24: Regional share of the luxury goods market, 2007-14
Country market sizes
HNWIs and spending by region
Figure 25: Share of HNWIs and luxury market sales, by region, 2014
HNWIs and spending by country
Figure 26: Top 10 countries in the luxury market, by sales, 2010-14
Figure 27: Country shares of the global luxury market, 2010-14
Americas
Figure 28: The Americas: Leading luxury goods markets, 2010-14
Figure 29: Leading American luxury markets’ share of all luxury spending in the Americas, 2010-14
Asia-Pacific
Figure 30: Asia-Pacific region: Leading luxury goods markets, 2010-14
Figure 31: Asia-Pacific region: Leading luxury goods markets, 2010-14
Europe
Figure 32: Europe: Leading luxury goods markets, 2010-14
Figure 33: Leading European luxury markets’ share of all luxury spending in Europe, 2009-13

Luxury Market – Segment Performance

Fashion and leather goods
Market size
Figure 34: Global luxury market: Fashion and leather goods sales, 2010-14
Market share
Figure 35: Top 10 leading luxury goods retailers, by % share of global luxury fashion and leather goods market, 2013 and 2014
Jewellery and watches
Market size
Figure 36: Global luxury market: Jewellery and watch sales, 2010-14
Market share
Figure 37: Top 10 leading luxury goods retailers, by % share of global luxury fashion and leather goods market, 2013 and 2014
Perfumes and cosmetics
Market size
Figure 38: Global luxury market: Perfumes and cosmetics sales, 2010-14
Market share
Figure 39: Top 10 leading luxury goods retailers, by % share of global luxury perfumes and cosmetics market, 2013 and 2014
Country analysis
Figure 40: Sales by product in selected luxury markets (excl. VAT), 2014

The Consumer – Who Buys Luxury Goods

Key points
What we asked
Technical note
Luxury popularity dips in China
UK on the rise
Figure 41: Those who had bought luxury in the last 18 months, by country, May 2014 and April/May 2015
Female shoppers more important in China
Figure 42: Those who had bought luxury in last 18 months by country and by gender, April/May 2015
Younger bias
Figure 43: Those who had bought luxury in last 18 months by country and by age, May 2015
Women aged 25-44 years are key consumers in China
Figure 44: Those who had bought luxury in China in last 18 months by age, April 2015
Figure 45: Those who had bought luxury goods in China in last 18 months by gender and age, April 2015
Affluence is a key driver in mainland Europe
Figure 46: Those who had bought luxury in last 18 months in Spain, Italy, France and Germany by household income, May 2015
And elsewhere
Figure 47: Those who had bought luxury in last 18 months in UK, USA and China by household income, April/May 2014

The Consumer – Where They Buy

Key points
What we asked
Technical note
Shopping preferences vary across the globe
Online takes pole position in the US and UK
More traditional channels in mainland Europe
Figure 48: Where they bought luxury goods by country, April/May 2015
Trend data
Shopper numbers rising in the US
Figure 49: US: Where they bought luxury goods by selected channels, May 2014 and May 2015
In-store shopper numbers drop in China
Figure 50: China: Where they bought luxury goods by selected channels, May 2014 and April 2015
Figure 51: China: Where they bought luxury goods by selected domestic channels, May 2014 and April 2015
Europe
Figure 52: Mainland Europe: Where they bought luxury goods by selected channels, May 2014 and May 2015
Who buys where
China
Figure 53: China: Where they shop for luxury in China, by age and affluence, April 2015
France
Figure 54: France: Where they shop for luxury in France, by age and affluence, May 2015
Germany
Figure 55: Germany: Where they shop for luxury in Germany, by age and affluence, May 2015
Italy
Figure 56: Italy: Where they shop for luxury in Italy, by age and affluence, May 2015
Spain
Figure 57: Spain: Where they shop for luxury in Spain, by age and affluence, May 2015
UK
Figure 58: UK: Where they shop for luxury in the UK, by age and affluence, May 2015
US
Figure 59: US: Where they shop for luxury in US, by age and affluence, May 2015

The Consumer – Spending Intentions

Key points
What we asked
Technical note
Chinese and US consumers are more bullish
Figure 60: 2015 spending intentions, by country, April/May 2015
Figure 61: US: Luxury shoppers who intend to spend more on luxury goods in 2015 than 2014, by age, May 2015
Europeans less confident

The Consumer – Attitudes to Shopping Online for Luxury

Key points
What we asked
Technical note
Appetite for online luxury
Multi-channel experience
Figure 62: Attitudes to shopping online for luxury, April/May 2015
Figure 63: Selected attitudes to shopping online for luxury, April/May 2015
Price versus experience
Personalisation
Figure 64: Selected Attitudes to shopping online for luxury, April/May 2015
Attitudes by demographics
Attitudes by where they shopped
Appetite for low price luxury
UK
Figure 65: UK: Attitudes by where they shopped online and in stores in UK, May 2015
France
Figure 66: France: Attitudes by where they shopped online and in stores in France, May 2015
Germany
Figure 67: Germany: Attitudes by where they shopped online and in stores in Germany, May 2015
Italy
Figure 68: Italy: Attitudes by where they shopped online and in stores in Italy, May 2015
Spain
Figure 69: Spain: Attitudes by where they shopped online and in stores in Spain, May 2015
US
Figure 70: US: Attitudes by where they shopped online and in stores in US, May 2015
China
Figure 71: China: Attitudes by where they shopped online and in stores in China, April 2015

The Consumer – Attitudes to Luxury Services

Key points
What we asked
Technical note
Appetite for custom-made designs
Interactive store experience
Figure 72: Attitudes to luxury services, April/May 2015
Figure 73: Selected Attitudes to luxury services, % agreeing with statement, April/May 2015
Personal advisors
Smartphone marketing
Figure 74: Selected attitudes to luxury services, % agreeing with statement, April/May 2015
Attitudes by where they shopped
UK
Figure 75: UK: Attitudes to luxury services by where they shopped online and in stores in UK , May 2015
France
Figure 76: France: Attitudes to luxury services by where they shopped online and in stores in France, May 2015
Germany
Figure 77: Germany: Attitudes to luxury services by where they shopped online and in stores in Germany, May 2015
Italy
Figure 78: Italy: Attitudes to luxury services by where they shopped online and in stores in Italy, May 2015
Spain
Figure 79: Spain: Attitudes to luxury services by where they shopped online and in stores in Spain, May 2015
US
Figure 80: US: Attitudes to luxury services by where they shopped online and in stores in US, May 2015
China
Figure 81: China: Attitudes to luxury services by where they shopped online and in stores in China, April 2015

Who’s Innovating?

In-store
Online

Online

The market
The outlook
The brands online
Figure 82: Major luxury brands: Number of national, transactional websites, 2014-15
Yoox Net-A-Porter Group
The consumer: shopping online
Figure 83: Percentage of luxury-goods shoppers buying luxury goods online in the last 18 months, May 2014-15
Figure 84: Percentage of luxury goods shoppers buying luxury goods online in the last 18 months, by type of retailer website, May 2015

Company Metrics

Company revenues
Figure 85: Leading luxury companies, by net revenues, 2012-14
Revenue growth rates
Figure 86: Leading luxury companies: % CAGR in revenues, 2010-14
Product revenue mix
Figure 87: Leading luxury companies: % Sales mix, by product group revenue, 2014
Asia-Pacific revenue
Figure 88: Leading luxury companies: % of revenues deriving from Asia-Pacific region, 2013-14
Figure 89: Total luxury sales growth in the Asia-Pacific region, 2010-14
Store numbers
Figure 90: Selected leading luxury retailers, estimated store numbers, 2014
Brand ownership
Figure 91: Brand ownership, by leading luxury companies, 2015
Swiss watchmakers output
Figure 92: % share of all COSC certificates accounted for, by leading Swiss-watch brands, 2013-14
Figure 93: Number of Swiss watch certificates issued by the COSC, 2013-14
Figure 94: Number of Swiss watch certificates issued by the COSC, three leading brands, 2010-14

Brand Sales and Market Shares

Figure 95: Leading luxury brands: Sales, 2012-14
Figure 96: Leading luxury brands, share of all luxury sales, 2012-14

Burberry Group

What we think
China and Japan
Connecting with its customers on a global scale
Digital commerce
Must-have fashion items
Capitalising on the opportunities in travel retail
Multi-pronged assault on the lucrative beauty category
Enhanced in-store experience
Company background
Company performance
Figure 97: Burberry Group Plc: Group financial performance, 2010/11-2014/15
Figure 98: Burberry Group Plc: Directly-operated stores data, 2010/11-2014/15
E-commerce

Christian Dior Couture

What we think
Expansion and renovation
Continuing the shift in focus to Asia
E-commerce could be expanded
Fusion sneakers prove popular
Company background
Company performance
Figure 99: Christian Dior Couture: Group financial performance, 2010-15
E-commerce

Coach

What we think
Expanded lifestyle product offering
Next-generation store concept delivering positive results
New marketing push highlights brand’s change of customer focus
Targeting sales of $600m in China
Company background
Company performance
Figure 100: Coach Inc.: Group financial performance, 2009/10-2014/15
Figure 101: Coach Inc.: Net sales, by region, 2011/12-2014/15
Figure 102: Coach Inc.: Sales breakdown, by product, 2011/12-2013/14
Figure 103: Coach Inc.: Operated store data, 2011/12-2013/14
E-commerce

Estee Lauder Companies

What we think
Targeting the Millenials generation
Acquisitions boost growth
China is vital
Online
Company background
Company performance
Figure 104: Estée Lauder Companies: Group financial performance, 2009/10-2014/15
Figure 105: Estée Lauder Companies: Group financial performance, by region, 2009/10-2013/14
Figure 106: Estée Lauder Companies: Group financial performance, by product area, 2009/10-2013/14
Figure 107: Estée Lauder Companies: Net sales, by distribution channel, 2009/10-2013/14
E-commerce

Giorgio Armani

What we think
Broad luxury offer
Extending the brand
Celebrating 40 years
Company background
Company performance
Figure 108: Giorgio Armani: Group financial performance, 2010-14
E-commerce

Hermes

What we think
Growth in Asia remains strong
Leather Goods and Saddlery lead growth
Online approach
LVMH issue resolved
Company background
Company performance
Figure 109: Hermès: Financial performance, 2010-14
Figure 110: Hermès: Sales by product category, 2013-14
E-commerce

Kering

What we think
Where next?
Company background
Company performance
Figure 111: Kering: Financial Performance 2010-14
Figure 112: Kering Luxury: Breakdown of revenue by product category and by region, 2010-14
Gucci
Figure 113: Gucci: Breakdown of revenue by product category and by region, 2010-14
Bottega Veneta
Figure 114: Bottega Veneta: Breakdown of revenue by product category and by region, 2010-14
Yves Saint Laurent
Figure 115: Yves Saint Laurent: Breakdown of revenue by product category and by region, 2010-14
Outlets
Figure 116: Kering Luxury: Directly operated stores, 2013-14
E-commerce

L’Oréal Luxe

What we think
Strongest growth segment for L’Oréal
Good performance from recent acquisitions
Group digital transformation gathers pace
Company background
Company performance
Figure 117: L’Oréal Group: Net revenues by division, 2010-14
Figure 118: L’Oréal Luxe: Financial performance, 2010-2014
Figure 119: L’Oréal Luxe: Sales by region and product area, 2011-2014
E-commerce

LVMH – Moët Hennessy-Louis Vuitton

What we think
Slowdown in China
Figure 120: LVMH – Share of sales by region, 2009-14
Where next?
Company background
Company performance
Figure 121: LVMH: Group financial performance, 2010-14
Figure 122: LVMH: Distribution of revenues, by region, 2010-14
Figure 123: LVMH: Distribution of segment revenues, by region, 2010-14
Figure 124: LVMH, Outlet portfolio, 2013-14
E-commerce

Prada Group

What we think
Where next?
Company background
Company performance
Figure 125: Prada: Group financial performance, 2010/11-2014/15
Figure 126: Prada: Group net revenue breakdown, by channel, 2010/11-2014/15
Figure 127: Prada: Group net revenue breakdown, by channel, 2010/11-2014/15
Figure 128: Prada: Group net revenue breakdown, by product line, 2012/13-2014/15
Figure 129: Prada: Directly operated stores, 2013/14-2014/15
E-commerce

Ralph Lauren Corporation

What we think
Global brand restructuring plan to drive profitability
New uber-luxe store concept aimed at VIP customers
Targeting $1bn in online sales
Tapping into wearable technology
Innovative fragrance shopping experience
International expansion opportunities identified in Asia and Brazil
Company background
Company performance
Figure 130: Ralph Lauren Corporation: Group financial performance, 2010/11-2014/15
Figure 131: Ralph Lauren Corporation: Revenue contributions, by segment, 2010/11-2014/15
Figure 132: Ralph Lauren Corporation: Turnover, by region, 2010/11-2014/15
E-commerce

Richemont

What we think
Company background
Company performance
Figure 133: Richemont: Group financial performance, 2011/12-2014/15
Figure 134: Richemont: Revenues by region, 2011/12–2014/15
Figure 135: Richemont: Revenues by category, 2010/11–2014/15
Figure 136: Richemont: Revenues by Maison, 2011/12-2014/15
E-commerce

Shiseido

What we think
Ready to rebound?
Investing in R&D
The China issue
Figure 137: Shiseido – Share of sales by region, 2011-15
Company background
Company performance
Figure 138: Shiseido: Group financial performance, 2010/11-2014/15
Figure 139: Shiseido: Sales split, domestic vs overseas, 2010/11-2014/15
Figure 140: Shiseido revenues, by region, 2010/11-2014/15
E-commerce

Swatch Group – Luxury

What we think
E-commerce still a missing link
Dispute with Tiffany & Co still not resolved
Company background
Company performance
Figure 141: Swatch: Group financial performance, 2010-14
Figure 142: Swatch Group: Estimated revenues from the luxury brands only, 2010-14
Figure 143: Swatch Group: Watches and jewellery segment performance, 2010-14
Figure 144: Swatch Group: Net sales, by region, 2010-14
E-commerce

Tiffany & Co.

What we think
New couture jewellery collection aimed at the ultra-wealthy
Re-establishing itself in the luxury watch market
Targeting the self-gifting financially independent female consumer
Same-sex campaign broadens appeal of its engagement rings
European store expansion on back of sales growth in the region
Authentic shopping experience
Company background
Company performance
Figure 145: Tiffany & Co.: Group financial performance, 2010/11-2014/15
Figure 146: Tiffany & Co: Sales growth, by region, 2014/15
Figure 147: Tiffany & Co.: Outlet data, 2010/11-2014/15
E-commerce

Tod’s Group

What we think
Reinventing the brand
New creative chiefs spearhead clothing and accessories line
Hogan spin off rumours casts doubt over the brand’s long term global appeal
Roger Viviers licensing deal up for renewal
Company background
Company performance
Figure 148: Tod’s Group: Financial performance, 2010-14
Figure 149: Tod’s Group: Sales, by region, 2014
Figure 150: Tod’s Group: Sales, by region, 2013-14
Figure 151: Tod’s Group: Sales, by product type, 2014
Figure 152: Tod’s Group: Sales by product type, 2013-14
Figure 153: Tod’s Group: Sales by brand, 2014
Figure 154: Tod’s Group: Sales, by brand, 2013-14
E-commerce

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