PARIS – China should help the luxury goods sector bounce back to growth in 2010 after its annus horribilis, but a return to the glory days of the last decade is unlikely, according to a new HSBC report on the sector.

“Our analysis is that despite China’s boom and the non-recurrence of the 2009 de-stocking impacts, 2010 will show only decent mid to high single-digit organic growth for the sector – in line with the long term average of 7 percent – and not the mid-teens hyper-growth experienced from 2004 to mid 2008,” HSBC analysts Erwan Rambourg and Antoine Belge wrote.

Women, and lower-priced brands and product categories, are likely to become key drivers of the luxury goods market in China, which until now has been sustained mainly by business gift purchasing by men, they said.

However, the analysts cautioned firms against piling all their investments into China, which is vulnerable to shifting consumer tastes and increasingly sophisticated counterfeiters. “Luxury stocks will need positive earnings surprises stemming from outside Asia in order to outperform,” the report noted.

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