MODEST EXPECTATIONS: Ratings agency Standard & Poor’s foresees modest growth for the luxury industry in the coming years, fueled by emerging economies and the flow of wealthy people into Europe. The Italian branch of the company issued a report this week entitled “Europe’s Luxury Goods Industry Will Likely Cope Well With Ongoing Shifts in Global Demand,” projecting that the industry will continue to grow at a “mid-single-digit pace.” The engines behind growth will be the rising demand from newer economies such as China, and from affluent people worldwide buying homes and spending time in European cities such as London.
It said that key credit factors for luxury companies will be their ability to “protect and enhance” their brands and to diversify into new products and markets. “We believe that consolidation will likely continue, and that the polarization between big players and smaller ones may increase,” the report noted. That said, the report stressed that well-managed independent companies that make quality products such as Giorgio Armani, Max Mara and Ermenegildo Zegna, “are well-placed to remain successful and keep growing.”