The financial management and advisory consultant, Merrill Lynch, has said it is expecting Europe’s leading luxury goods groups to expand faster than any of the world’s seven largest economies over the next three years.  The firm’s luxury goods analyst, Antoine Colonna, has predicted that listed and unlisted firms will register like-for-like sales growth of between 3.5 and 4%, compared with forecasts for annual GDP growth of 2% among the G7 nations.

Colonna forecast that operating profit from the strongest companies could even increase 10% year-on-year. He described the luxury market as becoming increasingly cyclical, however, while the cycles themselves were becoming shorter. This was party due to the firms’ forays into retailing, Colonna said, a trend that could be expected to increase their exposure to higher fixed costs and shifting consumer trends.  Colonna also predicted an upturn in acquisitions, probably in 2004 and 2005, though not at the same pace as in 2000.

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