The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
BASEL, Switzerland — Millennials feel better about their future earnings than older consumers and spend more on luxury goods.
That’s according to a survey of more than 3,000 consumers across China, Europe and the US by UBS Group AG. Eighteen to 35 year olds have contributed 85 percent to growth in the luxury market last year and will represent 45 percent of total high-end spending by 2025, according to the report published Friday.
Gucci and Louis Vuitton are millennials' favourite brands, according to the survey and social-media data analysed by UBS. While the intent to buy online is higher in the age group than among older consumers, physical stores continue to feature highly among preferred places to shop.
Chinese millennials, a major driving force behind sales growth, allocate about 20 percent of discretionary income to purchasing luxury goods, a similar share as older generations. Younger people in Italy and the US have higher spending budgets than their elders, according to the report.
By Xiaoqing Pi; editors: Paul Gordon, Jana Randow and Zoe Schneeweiss.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.