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06 January 2015

The Lap of Luxury 

Much of Europe’s economy may have been languishing in recent years, but not its luxury goods sector. According to a report by Frontier Economics, the number of people employed in the production of high-end cars, wine and fashion grew 11% to more than 1.1 million between 2010 and 2013.

The report argues that the luxury sector has thrived despite the continent’s slow emergence from the financial crisis. Over the four-year period, sales of luxury goods of all kinds grew by 28% to €547 billion, and increased as a share of European GDP from 3% to 4%.

The trade body that commissioned the report, the European Cultural and Creative Industries Alliance, is not worried about signs that luxury goods sales in Asia, and especially China, have declined in recent months.

Michael Ward, chair of the organization and CEO of upmarket department store group Harrods, says a clampdown on corruption means that Chinese clients are no longer spending so much on expensive business gifts, but the sector’s core market remains strong.

Meanwhile, another report from retail research and consulting firm Conlumino says the UK is poised to overtake Italy and France to become Europe’s largest luxury goods market by 2018, with its share of European sales rising from 15.8% to 19.6%.

While the current top two countries continue to struggle economically, Britain is benefiting from London’s appeal both to wealthy tourists for its shopping opportunities and a growing resident population of high net worth individuals from around the globe.