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Published by: Mintel International Group Ltd.
Published: Jul. 1, 2006
Table of Contents
- EXECUTIVE SUMMARY
- Global luxury goods market worth €70 billion in 2005
- Retail value closer to €100 billion
- Tightening control of distribution
- LVMH is the leading luxury goods company
- Europe is the largest luxury goods market
- Growth in US and Asia-Pacific continues to drive market
- Explosive growth in China
- Fashion and leather category the largest
- Investors increasingly attracted to luxury market
- Strong growth forecast for luxury market
- THE GLOBAL LUXURY GOODS MARKET
- REPORT SCOPE
- TERMS AND DEFINITIONS
- Luxury goods - A definition
- Exchange rates
- Figure 1: US Dollar to Euro exchange rates, 2001-05
- Regions
- Product categories
- TECHNICAL NOTES
- Financial definitions
- Other abbreviations
- GLOBAL LUXURY GOODS MARKET SIZE
- Figure 2: Estimated global luxury goods market size and major players' turnover, 2004-05
- Figure 3: Global luxury goods market: Percentage of leading operators by domicile, 2005
- Regional breakdown
- Figure 4: Global luxury goods market: Estimated value breakdown by region, 2005
- Figure 5: Global luxury goods market: Percentage breakdown, by region, 2005
- Europe
- North America
- Japan
- China
- Other markets
- Product breakdown
- Figure 6: Global luxury goods market: Estimated product breakdown, 2005
- Figure 7: Global luxury goods market: Estimated breakdown by major product category, 2005
- Perfumes and cosmetics
- Targeting younger consumers
- Male market - a growth area
- Anti-ageing products
- Fashion and leather goods
- Handbags driving the market
- Move to more muted tones
- Size matters
- Man-bags
- No-logo
- Watches and jewellery
- Watch trends
- Jewellery trends
- The ’Other Products’ category
- COUNTERFEITING
- Counterfeit product market size
- Counterfeit luxury goods
- Counterfeit luxury goods buyers
- Brand control - battling against the counterfeiters
- Internet aiding the counterfeiting business?
- LVMH targets the merchants
- FAST FASHION - IMITATION IS THE SINCEREST FORM OF FLATTERY?
- CORPORATE ACTIVITY
- Major merger & acquisitions 2004, 2005 and first half of 2006
- OUTLOOK AND FORECASTS
- Outlook
- Will 2006 see a slowdown?
- Trends and market drivers
- Selected current trading data
- Macro-economic data
- Other data
- Forecasts
- Figure 8: Global luxury goods market: Forecast, 2006-07 and 2010
- THE LUXURY GOODS MARKET - DEMAND DRIVERS AND THE ECONOMIC CYCLE
- Introduction
- GDP growth
- Slower growth in larger luxury goods markets
- Slowdown forecast for 2006 and 2007
- Figure 9: Selected regional and national real GDP growth rates and forecasts, 2003-07
- Figure 10: Key luxury goods markets’ real GDP growth, 2004 and 2005
- Stockmarket fluctuations impact market growth
- Exchange rate movements also influence market
- Figure 11: Relative performance of Yen against US$ and Euro, 2001-05
- The Yuan and the US Dollar
- Japanese consumers’ global influence waning?
- Recovery in Japan continues in 2005
- Figure 12: Japanese tourist departures, 1990-2007
- Chinese consumers becoming more important to luxury goods market?
- High Net Worth Individuals (HNWIs)
- HNWIs background
- More rich than ever before...
- ...and they are getting richer
- Figure 13: World: High Net Worth Individuals, 2001-05
- Increase in Asia-Pacific and North American wealth driving market
- Figure 14: Number of High Net Worth Individuals by region, 2001-05
- North America recovery continues in 2004
- Figure 15: Net worth of HNWIs, 2001-05
- 87 million millionaires
- Wealth forecast to 2010
- Figure 16: Wealth forecast - HNWI average annual growth in financial wealth by region, 2005-10
- CHANNELS OF DISTRIBUTION
- INTRODUCTION
- Control distribution and you control the brand
- Channel structure
- BRAND BOUTIQUES
- Background
- Directly-operated vs franchised?
- DOS gaining ground
- Status quo
- Figure 17: Luxury brands: Company-owned stores
- Jewellery
- Watches
- Emerging markets
- Market development/trends
- Stores communicate brand
- Location
- Demand for thrills
- Interaction with products
- The e-impact
- Figure 18: Luxury brands: Websites, 2006
- Too accessible?
- No touching
- Boring functionality
- Taking control
- Outlook
- DOS trend continues
- Branded stores head East
- And revamp where established
- But at what cost?
- No avoiding the web
- LICENSING
- What is a licence?
- The evolution of licensing
- Figure 19: The evolution of licensing
- Return to control - different approaches
- 1) Pierre Cardin - over-extending the brand
- Figure 20: Pierre Cardin - over-extending the brand
- 2) Gucci - taking back control
- Figure 21: Gucci - taking back control
- 3) Burberry - striking a balance
- Figure 22: Burberry - striking a balance
- 4) LVMH - keeping it in-house
- Figure 23: LVMH - keeping it in-house
- Parallel imports
- Tesco vs Levi's case
- Louis Vuitton rations shoppers
- The pros and cons of licensing
- Figure 24: Pros and cons of licensing
- Licensing versus integrated distribution
- Specialist manufacturing and distribution
- Perfumes and cosmetics
- Eyewear
- Figure 25: Eyewear licensed brands, 2006
- The future of licensing
- CONCESSIONS
- Background
- Definition
- A mutually beneficial arrangement
- Department to destination store
- How to stand out?
- Market developments/factors
- Identity crisis?
- Showcasing luxury
- Threat from developing brands
- Brand control
- Safe entry vehicle
- Outlook
- The march of the brand boutique continues
- ...but concessions remain complementary
- Potential still remains
- Boost from accessories?
- THE TAX-FREE/DUTY-FREE MARKET
- The global luxury goods tax-free retail market size
- Regional breakdown
- Figure 26: Global duty-free sales of luxury goods, breakdown by region, 2004
- Product categories
- Figure 27: Global duty-free sales of luxury goods, breakdown by major product category, 2004
- Growing market
- Airport retailing increasing its dominance
- Duty-free shopping
- History of duty-free
- Tax-free retailing
- Leading tax-free luxury goods retailers
- Outlook
- LUXURY GOODS PRODUCT MARKETS
- INTRODUCTION
- Background
- Product market sizes
- Figure 28: Global luxury goods market: Estimated product breakdown, 2005
- LEATHER GOODS AND ACCESSORIES
- Background
- ’It’ Bags
- Entry-level products
- Move towards even greater exclusivity
- Brand licensing
- Market size and trends
- Figure 29: Global leather goods and accessories market: Estimated market shares, 2005
- Leading players
- LVMH
- Coach
- Gucci Group
- Prada
- Hermès
- Richemont
- Product trends
- Handbags continue to drive category
- Re-invention and updated classics
- Shape and colour trends
- Big bags
- Man-bags
- No logo?
- Counterfeiting
- Outlook
- Accessible accessories?
- Über Luxury segment growing
- Customisation
- READY-TO-WEAR AND FOOTWEAR
- Background
- History
- Definitions
- Are brands the real fashion victims?
- Market size and trends
- Figure 30: Global ready-to-wear and footwear market: Estimated market shares, 2005
- Leading players
- Figure 31: Global ready-to-wear and footwear market, brand stables and retail presence, 2005
- Polo Ralph Lauren
- Figure 32: Polo Ralph Lauren: Turnover, by channel and region, 2006
- Tommy Hilfiger
- Figure 33: Tommy Hilfiger: Turnover, by channel, 2004/05 and to end-2005
- Figure 34: Tommy Hilfiger: Brands, 2006
- Max Mara
- Figure 35: Max Mara: Brands, 2006
- Armani
- Figure 36: Armani: Wholesale turnover, by region and label, 2004
- Figure 37: Armani: Brands, 2006
- Figure 38: Armani Group: Direct retail network, as at end-December 2005
- Chanel
- Ermenegildo Zegna
- Figure 39: Ermenegildo Zegna: Brands, 2006
- Escada
- Figure 40: Escada brand sales, by region and segment, 2004/05
- Product trends
- Industry developments
- Luxury for the masses
- What is luxury?
- The industry strikes back?
- Faster
- Better
- (In)Accessible
- Customised
- The creative carousel
- Outlook
- 'Fast fashion'
- Brand 'stretching'
- PERFUMES AND COSMETICS
- Background
- History
- Market size and trends
- Market structure
- Control over the distribution chain
- Market size
- Market shares
- Figure 41: Global luxury goods market: Perfume & cosmetics sector, estimated market shares, 2005
- Leading players
- Figure 42: Leading luxury goods perfume and cosmetics brands, 2006
- Estée Lauder
- Shiseido
- L'Oréal (Luxury Products Division)
- YSL Beauté
- Product trends
- Celebrity fragrances
- Targeting younger consumers
- Male market - a growth area
- Anti-ageing products
- Outlook
- Product innovation
- Opportunities in emerging markets
- Expanding niche customer markets
- LUXURY WATCHES AND JEWELLERY MARKET
- Background
- History
- Two closely-related markets
- Market size and trends
- Figure 43: Leading luxury jewellery and watch brands, 2003 and 2005
- Watches
- Leading players
- Figure 44: Luxury watchmakers acquisitions
- Rolex
- Swatch Group
- Other brands
- Figure 45: Other luxury watch brands
- Regional trends
- Figure 46: Distribution of Swiss watches, by region, 2004-05
- Figure 47: Global distribution of Swiss watches, by major regions, 2005
- Figure 48: LVMH watches and jewellery division, sales by region, 2005
- Product trends
- Jewellery
- Leading players
- Figure 49: Re-invention and reinvigoration of high-end jewellers
- Product trends
- Outlook
- China's growing affluence targeted
- Product innovation
- Differentiation
- MAJOR COMPANY PROFILES
- BURBERRY
- Background
- Repositioning
- Financial data
- Five-year summary
- Figure 50: Burberry Group: Financial data, 2001/02-2005/06
- Figure 51: Burberry Group: Turnover by regional market, 2001/02-2005/06
- Full year 2005/06
- Outlets
- Retail expansion
- Figure 52: Burberry Group: Outlet data, 2002-06
- Presence by country
- Figure 53: Burberry Group: Outlets by region, 2002 and 2006
- Impact of company owned stores
- Japan
- Channels of distribution
- Figure 54: Burberry Group: Turnover by channel, 2001/02-2005/06
- Products
- Figure 55: Burberry Group: Turnover by product category, 2005/06
- Clothing
- Figure 56: Burberry Group: Fashion brands
- Clothing icons
- Accessories
- The 'It' bag category
- Logo
- Footwear
- Home
- Fragrances
- Advertising
- Online presence
- Figure 57: Burberry Group: Websites, April 2006
- Outlook
- GUCCI GROUP
- Background
- Turnaround
- PPR ownership
- Figure 58: Gucci Group: Brands
- Group financial data
- Figure 59: Gucci Group: Financial data, 2001/02-2005
- Figure 60: Gucci Group: Turnover by brand, 2001/02-2005
- Figure 61: Gucci Group: Turnover by region, 2003-05
- Group outlets
- Figure 62: Gucci Group: Outlet data by brand, 2001-05
- Figure 63: Gucci Group: Outlet data by country, 2001-05
- Products
- Figure 64: Gucci Group: Group turnover by product category, 2002/03 and 2005
- Major brand divisions
- Gucci
- Figure 65: Gucci division: Sales by geographic location, 2005
- Figure 66: Gucci division: Sales by product category, 2003-05
- Yves Saint Laurent
- Figure 67: Yves Saint Laurent: Turnover by product group, 2005
- YSL Beauté
- Bottega Veneta
- Figure 68: Bottega Veneta: Geographical breakdown of sales, 2005
- Other operations
- Emerging brands
- Online and mail order
- Figure 69: Gucci Group: Group websites, 2006
- Outlook
- LVMH HOLDING
- Background
- Louis Vuitton + Möet Hennessy = LVMH
- Arnault teams up with Guinness to take control
- LVMH grows through acquisition
- Group structure
- Figure 70: Christian Dior/LVMH ownership structure, 2005
- Christian Dior Couture
- Financial and outlet data
- Figure 71: Christian Dior Couture: Financial data, 2001-05
- Figure 72: Christian Dior Couture: Revenue by business sector, 2001-05
- Figure 73: Christian Dior Couture: Retail revenue by geographical location, 2001-05
- Products/design strategy
- LVMH brand portfolio
- Figure 74: LVMH: Owned brands, by division, as at 31 December 2005
- Group financial data
- Figure 75: LVMH: Group financial data, 2001-05
- Figure 76: LVMH: Group sales, by region, 2005
- Figure 77: LVMH: Group outlet data, by division and region, 2001-05
- Review by division
- Fashion and leather goods
- Figure 78: LVMH: Fashion & leather goods division, financial and outlet data, 2001-05
- Figure 79: LVMH: Fashion & leather goods division's sales breakdown, by region, 2001 and 2005
- Louis Vuitton
- Figure 80: LVMH: Louis Vuitton, Sales growth and outlet data, 2001-05
- Fendi
- Figure 81: LVMH: Fendi outlets, 2001-05
- Berluti
- Kenzo
- Givenchy
- Marc Jacobs
- StefanoBi
- Emilio Pucci
- Thomas Pink
- Donna Karan
- eLuxury.com
- Perfumes and cosmetics
- Figure 82: LVMH: Perfumes and cosmetics division, financial and outlet data, 2001-05
- Figure 83: LVMH: Perfumes and cosmetics division sales, by region, 2001 and 2005
- Parfums Christian Dior
- Guerlain SA
- Parfums Givenchy
- Kenzo Parfums
- Laflachère
- BeneFit Cosmetics
- Fresh
- Make Up For Ever
- Acqua di Parma
- Perfumes Loewe
- Watches and jewellery
- Figure 84: LVMH: Watches and jewellery division, financial and outlet data, 2001-05
- Figure 85: LVMH: Watches and jewellery division sales, by region, 2001 and 2005
- TAG Heuer
- Zenith International
- Benedom - Dior Watches
- Fred Joaillier
- OMAS
- Chaumet International
- De Beers LV
- E-commerce
- Outlook
- RICHEMONT
- Background
- Financial data
- Richemont raises its performance
- Figure 86: Richemont Group: Financial performance, 2001/02-2005/06
- Europe remains the group's key market
- Figure 87: Richemont: Sales by region, 2005/06
- Outlets
- Figure 88: Richemont Group: Number of outlets, 2001-05
- Products
- Figure 89: Richemont: Sales by product category, 2005/06
- Review by business segment
- Figure 90: Richemont: Turnover by business segment, 2005/06
- Jewellery
- Figure 91: Jewellery division: Financial performance, 2001/02-2005/06
- Cartier
- Van Cleef & Arpels
- Specialist watchmakers
- Figure 92: Specialist watchmakers division: Financial performance, 2001/02-2005/06
- Jaeger-LeCoultre
- Piaget
- Baume & Mercier
- IWC
- Vacheron Constantin
- A Lange & Söhne
- Officine Panerai
- Writing instrument manufacturers
- Figure 93: Writing instrument manufacturers: Financial performance, 2001/02-2005/06
- Montblanc
- Montegrappa
- Leather and accessories
- Figure 94: Leather and accessories: Financial performance, 2001/02-2005/06
- Alfred Dunhill
- Lancel
- Other businesses
- Figure 95: Other businesses: Financial performance, 2002/03-2005/06
- Chloé
- Shanghai Tang
- James Purdey & Sons
- Outlook
- HERMÈS
- Background
- Financial data
- Robust performance in 2005
- Figure 96: Hermès: Financial data, 2001-05
- Figure 97: Hermès: Sales by major product category, 2002-05
- 2006 Q1 sales growth in the double-digits
- Figure 98: Hermès: Sales by region, 1st Quarter 2006
- Outlets
- Figure 99: Hermès: Stores by region, April 2006
- Products
- Figure 100: Hermès: Product breakdown, Q1 2006
- Outlook
- PRADA
- Background
- Group financial data
- Figure 101: Prada Holding NV: Financial data, 2002/03-2005/06
- Outlets
- Products
- Outlook
- Business restructuring
- Church's stake to be bought back?
- Prada's flotation plans
- TIFFANY & CO
- Background
- Financial data
- Figure 102: Tiffany & Co: Financial data, 2001/02-2005/06
- Figure 103: Tiffany & Co: Retail turnover by region, 2001/02-2005/06
- Outlets
- Figure 104: Tiffany & Co: Outlet data, 2002-06
- Products
- Outlook
- APPENDIX: RESEARCH METHODOLOGY
AbstractAccording to Mintel’s definition, based on the leading luxury goods companies, the global luxury goods market was worth an estimated €70.0 billion (US$87.5 billion) in 2005, up 9.2% on 2004. This increase comes despite a further strengthening of the Euro against the dollar during 2005.
The main focus of development in terms of distribution is retail, with many of the leading luxury companies looking to dramatically expand their own store networks, whilst cutting back on franchise and (market) licensing deals. The main attractions of retail for the leading luxury companies are higher margins and greater control of how, when and where their products are sold. Companies appear to be overcoming previous concerns with regard to brand control and counterfeiting as they plunge headlong into the Chinese marketplace. The opportunity that China represents is too great for the leading luxury players to ignore, with a rapidly growing economy that is increasing consumer wealth and creating literally millions of new millionaires.
While Mintel anticipates that the strong growth experienced in the first quarter of 2006 will slow slightly during the rest of the year, a strong growth of 11% is forecasted for 2006. Mintel expects growth to slow in 2007, but looking at the longer-term trend, the market will grow by approximately a third in the period to 2010.
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