PARIS, (Reuters) – The coronavirus crisis is over for the luxury goods industry, according to consultancy Bain on Thursday. This was fueled by high-end shoes, leather goods, and jewellery in the United States.

Bain projects that the global luxury market will be worth 283 billion euros (or $327 billion). This is a 4 percent increase at constant exchange rates compared with 2019, when the pandemic struck.

Early vaccinations and rapid recovery in local consumption helped to boost business in America, surpassing Europe this year as the biggest market. Although there were some restrictions in certain areas, demand in China, which is the main growth area of the luxury market, was strong throughout October. The Chinese cannot travel to other countries so they made purchases here.

Europe’s business is yet to recover to pre-COVID levels. It may be until 2024, even with a rebound in tourism activity this summer.

The largest players in the industry, like LVMH, Hermes and Kering have already recovered strongly from the health crisis, pushing well above 2019 levels of business as lockdowns ease and socialising resumes.

Overall sector sales fell 23% due to the pandemic in 2020. It was the largest ever drop and their first fall since 2009.

While international travel sales have declined, brand owners are able to attract new customers by catering to domestic consumers, and not just in luxury cities but in other second- and third-tier locations. Bain estimates that 25% of all global sales were with new customers this year.

Federica Levato from Bain, a Bain partner, co-authored this study.

Luxury purchases will be more than 60% for shoppers under 40, and 70% for those over 40.

2025

($1 = 0.8648 euros)