According to Bain & Company, a global management consulting firm, luxury goods that cater to wealthy American consumers perform better than those that target aspirational consumers on lower incomes who are put off by the country’s economic unpredictability.
In its twice-yearly report, Bain increased its annual sales forecasts for the global personal luxury goods market – spanning clothing, accessories and beauty products – and expects growth of between 5 per cent and 12 per cent this year, compared to previous expectations of between 3 per cent and 8 per cent.
China is seen as a major driver of growth now that Covid lockdowns have been lifted, but, chiming with company results from retailers over the past weeks, Bain flagged further evidence that a strong post-pandemic spending spree is waning in the United States.
Since younger consumers are more impacted by rising prices than older generations with higher incomes, many high-end labels are changing their merchandising methods or moving uptown to cater to their wealthiest customers, who are perceived as being more impervious to economic headwinds.
For instance, luxury clothing retailer Hugo Boss last week increased its sales and profit forecasts for 2025 and stated that it was anticipating revenue growth in the Asia-Pacific area as well as sustained good growth in the US. According to Bain, luxury sales totaled € 345 billion in 2022.
