The global luxury goods market will return to growth this year, rising to as much as €259 billion ($290 billion); showed a study by consultancy group Bain & Co.
According to the report, the upturn in the beleaguered industry will come as a result of a resurgence in Chinese consumer spending and a tourism revival in Europe.
In October, Bain predicted 2017 growth of up to two percent for the luxury sector.
Sales grew four percent in the first three months of 2017 over the same period last year.
They were lifted by particularly strong sales of accessories, jewelry and beauty products in mainland China.
“After a difficult 2016, the first quarter of 2017 brought some relief to the luxury industry. The continuous repatriation of Chinese consumption as well as a positive outlook in Europe both for locals and tourists will help drive overall market growth during the remainder of the year,” said Claudia D’Arpizio, Bain partner and lead author of the study.
Europe is expected to be the fastest-growing market for luxury goods this year, with tourism to Spain and the UK leading the recovery.
European sales are forecast to grow seven to nine percent as tourism recovers after the terrorist attacks in Paris, Nice, and Brussels.
Sales will grow six to eight percent in mainland China, the report said, adding sales in the rest of Asia could shrink two to four percent.
“The peak of the largest nationality wave ever to benefit luxury goods is behind us: There is not going to be another China,” said D’Arpizio.
She added that the growth we see now “is much healthier and less dependent on any one market or spending trend. The market is still very reactive. But for now, the luxury business looks in a much better place than it was this time last year.”
Bain expects annual sales of personal luxury goods, including high-end fashion, handbags, and jewelry, to total €280 billion to €290 billion by 2020.