High End Retail Goods In Danger Due to China Slowdown

Solid earnings and soaring share prices for Tiffany, Michael Kors and other luxury brands has led to widespread talk of a new boom in high-end goods, but it may be too early to pop the corks on the Dom Perignon.

A new study from one of the world’s top luxury experts predicts that growth in such sales will be as much as 50% slower this year than last. The main reason: China.

Claudia D’Arpizio, a partner at Bain & Co. and leader of its luxury and fashion practice, forecasts sales growth of 4 percent to 5 percent in worldwide luxury sales this year. That compares with 10 percent in 2012 and 11 percent growth in 2011. Total worldwide sales are projected to rise to between 220 billion euros ($288 billion) and 222 billion euros this year, from 212 billion euros last year, she said.

While currencies play a role in the slowdown, the study indicates that decreasing growth in Asia, especially China, and continued weakness in Europe will drag down the stronger performance of the U.S. and parts of Latin America.

CNBC

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