Economic growth is slowing in Japan, the euro area, and China but the speed of recovery in the US has surpassed all other economies. The Western world represents about 53% of LVMH’s revenues, a number that is more or less representative of the financial results of most luxury brands.
While there is heightened volatility in the markets because of the recent oil prices that have crashed it seems that 2015 can still be highly profitable for luxury brands if they manage their presence in the most advantageous markets. This will require more flexibility in setting growth strategies, perhaps greater investment in digital modes of distribution, and postponement of major capital investments away from the country of origin.
Thomaï Serdari for PIQluxury
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