Stellar growth appears to have gone out of fashion in the luxury goods industry. After a five-year run of soaring revenues and profits despite the financial crisis, a sales slowdown reflecting patchy Asian consumer enthusiasm, volatile exchange rates and geopolitical instability has taken its toll on some of the biggest names in this once unstoppable sector.
According to the BrandZ top 100 most valuable global brands ranking, compiled by Millward Brown, the value of luxury brands has slipped 6 per cent over the past year, outpaced by less glamorous sectors, including insurance, mass-market retail, telecoms and technology.
The category as a whole has been hit by anti-corruption laws in China that have weighed heavily on sales related to gift-giving. Student protests in Hong Kong, where 15 per cent of annual global luxury sales are made, have also taken their toll, as has Russia’s lurch into recession, triggered by the conflict in Ukraine.
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