If the luxury industry is growing less this year after enjoying nearly three years of bonanza, this not a drama, the head of Italian fashion house Ermanno Scervino said on Thursday.
Analysts expect the global luxury industry to grow between 7 percent and 9 percent in 2012, below the double-digit growth levels seen after the 2009 financial meltdown.
Demand for leather bags and chiffon dresses from wealthy Asian travelers has lifted luxury goods sales since 2009. But a slowdown in China, the fastest-growing luxury buyer, and a prolonged crisis in the euro zone have fuelled concerns that the effervescence is petering out.
A shock profit warning from British fashion brand Burberry (BRBY.L) on Tuesday hit shares across the sector, amid worries about the vulnerability of a sector whose wealthy clients had been resilient to the crisis.
Scervino is targeting 3 percent revenue growth this year, in line with its past years but far from global trends in 2011.
“There is nothing problematic with a 3 percent growth. Our focus is to improve production and grow in the long term,” Chief Executive Toni Scervino told the Reuters Consumer and Retail Summit in Milan.
His remarks echoed those of the chief executive of fashion house Roberto Cavalli, who told the Reuters summit he expected group revenue to grow between 5 and 6 percent this year.
Brozzetti said luxury groups should not set too ambitious targets for this year’s financial results, given the macroeconomic scenario.
Both Scervino and Brozzetti expressed confidence that the luxury sector is better positioned than other industries to sail through the global turmoil, as demand for high-end products from emerging markets is expected to remain strong.
Source: Thomson Reuters