Luxury spending set to rise

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Luxury spending set to rise

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Sales of luxury goods are set to rise unless there is a major global economic crisis.

A report by Boston Consulting Group predicts sales should increase by seven percent a year between now and 2014 thanks to the still-growing Chinese market.

But the management consultancy firm warned a big slowdown in China or another large emerging economy, like Brazil, would reduce the rate of growth.

Growth in so-called experiential luxury, such as adventure travel, spas and hotels will outpace growth of goods such as watches and designer gowns, BCG projected.

One example of a luxury company riding that growth is LVMH’s upscale Cheval Blanc five-star hotel franchise. It is expected to have a total of four locations by year-end.

Sales of this segment of luxury should rise 12 percent per year until 2014, BCG said.

Despite the dark clouds over luxury, the growth of the middle class in emerging markets like China, Brazil and Russia will be a boon for the global luxury market.

“The reservoir for growth still exists,” said Jean-Marc Bellaiche, a BCG senior partner who heads the firm’s luxury practice.