Bain sees two possible scenarios for luxury in 2021
Specialist consultancy firm Bain & Co has said the global luxury market has begun its path towards recovery following a turbulent year.
After analysing a range of company results, it has concluded that the industry achieved growth of between 0 and 1% in the first quarter of 2021, in comparison to the same period not in 2020, but in 2019, which it says is the last comparable year.
A Milan-based Bain team says the outlook for 2021 remains uncertain, but it says the market could achieve a value of €250 billion if one of two scenarios plays out, or €295 billion if an alternative scenario prevails.
The first possibility is that, despite strong momentum in the first quarter, full-year growth is stifled by “slower domestic luxury purchases and limited intra-regional tourism”. In this case, Bain has said, a recovery to 2019 levels would be expected only in 2022 and the market would reach €250 billion, or possibly as much as €265 billion this year.
However, the second scenario is that the momentum of the first quarter could continue, with the global luxury industry recovering to 2019 levels this year. That would give the industry revenues of at least €280 billion and possibly as much as €295 billion in 2021.
Bain has said it believes that the moment there is a 70% chance of scenario one happening and only a 30% chance for scenario two.
Image: Gucci
