* Bain & Co sees global luxury sales up 4 pct in 2010
* Sees first-half global luxury sales up 5-10 pct
* Says stronger brands will benefit most from the upturn
By Astrid Wendlandt, European Luxury Goods Correspondent
PARIS, April 16 Wealthy spenders are back in
the shops and should help lift global luxury sales by more than
4 percent this year as the industry recovers from its worst
slump ever, U.S. consultancy Bain & Co said in a study on
The industry is slowly turning its back on the black year
of 2009, during which luxury goods sales fell 8 percent, as
rising equity markets are boosting the confidence of
well-heeled buyers and prompting them to open their wallets
Bain said it expects global luxury sales to rise between 5
percent and 10 percent during the first half of the year
compared with the same period last year.
The study comes after the world's biggest luxury group,
LVMH (LVMH.PA), on Tuesday posted a 13 percent rise in
comparable first-quarter sales, twice what investors expected.
The company said retailers were rebuilding their stocks and
demand was picking up.
However, the maker of Louis Vuitton 10,000-euro handbags
and Hennessy cognac said at its annual general meeting Thursday
that it was too early to predict if the strong growth seen
during the first months of the year would last throughout 2010.
For a related story see [nLDE63E1LF].
Luxury goods stocks have enjoyed a strong rally in the past
year on the back of recovery expectations. Some, such as
Richemont CFR.VX and Swatch UHR.VX, have nearly doubled,
while LVMH has gained 71 percent.
"Luxury is growing again," the Zurich-based Julius Baer
Luxury Brands Fund said this week in a note, adding that
consumers suffered from "frugal fatigue."
The fund said valuations were not stretched, in spite of
the rally, as luxury stocks usually outperformed in rising
Bain predicted strong brands would benefit most from the
upturn and weak brands suffering from cash problems would have
to look for buyers or risk bankruptcy.
"This polarization creates fertile conditions for market
concentration. As mega-brands capture more market share, 2010
is likely to be a year when the search for capital triggers M&A
and IPOs, and continued challenging conditions for lagging
brands create ongoing risk for failures and bankruptcies," Bain
The U.S. consultancy said it expects apparel, watch and
jewellery sales to rise 4 percent this year, and revenue from
accessories, shoes and other leather goods to be up 5 percent.
China will remain the rising star with an expected 15
percent growth in its luxury sales this year, while Asia,
excluding Japan, should see luxury sales rise 10 percent, Bain
Luxury goods sales should rise 4 percent in America and 3
percent in Europe, while in Japan they should drop 3 percent,
(Reporting by Astrid Wendlandt; Editing by John Wallace)