Walpole, an organisation that represents the British luxury industry, have worked with luxury research specialists, Ledbury Research, to produce the first “UK Luxury Benchmark”, and the results look positive. Luxury sales in 2009 were better than expected and targeted respondents from the industry are upbeat about the year to come. Half of all respondents expected to see a decline in sales in 2009 and yet 38% saw volume increases. This year nearly 90% of respondents are anticipating a rise in sales and one in three are forecasting growth in their businesses of 10% or more.
Once again, much of the growth is being attributed to Asia. Mulberry are just one of many British brands recently targeting the region, with plans to open a new store in Hong Kong and another in mainland China.
In the UK the weak pound has also seen increased spending amongst foreign tourists who have boosted sales in British stores like Burberry. Indeed the study found that more than a quarter of the British luxury industry is generating more than 25% of its sales from visitors to the UK. And for two out of three British brands, sales in overseas markets account for at least one third of total annual sales. Middle Eastern visitors are particularly important in this respect. As Guy Salter, Deputy Chairman of Walpole observes: “It is these sorts of high spending visitors who are critical. The other thing about the Middle Eastern visitors is that they buy in bulk.”
The study also confirmed that more and more luxury brands are looking at improving their online strategy to drive sales. In fact some 56% of survey participants raised their online investment last year. Although clearly the industry still has quite a lot of catching up to do.
Going forward, a number of countries are contemplating austerity measures, which could make 2011 challenging. However, Salter believes that if luxury groups take the necessary action they will be able to withstand the challenges ahead.