Luxury industry optimism slides 14% in July-Sept qtr
The luxury industry appears to be less optimistic for the July-September quarter this year than it had been for the previous three months amid uncertainties about macro-economic stability and future demand.July 16, 2014 | comments ( 0 ) |
The luxury industry appears to be less optimistic for the July-September quarter this year than it had been for the previous three months amid uncertainties about macro-economic stability and future demand. According to Wealth-X, a global wealth intelligence and prospecting firm, the industry appears less optimistic for Q3, 2014 than it had for Q2.
The report said that 35 percent of respondents expect their share of the Ultra High Net Worth (UHNW) market to either remain the same or decline. The Luxury Industry Sentiment Index (LISI), stood at 83.6 percent for the third quarter of this year, a decrease of 14 percent over Q2 (April-June) quarter, when it stood as high as 97.6 percent.
"Much of this decline is linked to respondents having uncertainties about macro-economic stability and future demand, making them slightly more cautious in their assessments," Wealth-X said. The sharp decline in luxury index this quarter is largely because of the fact that over 20 percent of respondents felt that revenue especially from UHNW individuals is likely to fall or grow at a slower clip than overall revenue, the survey said.
The survey further noted only 65 percent expect to see their UHNW market share increase in the present quarter and 17 percent of respondents have no expansion plans for Q3 2014. Almost 30 percent of respondents felt there would be no changes to their total revenue in the coming quarter and a further 2 percent expect to see a decline, it added. "2014 seems to be a year of uncertainty for the luxury industry, with feelings of optimism declining as the year goes on.
This phenomenon is likely due to the waning of the sense of optimism that the industry felt at the beginning of the year in the face of the continued economic difficulties experienced," Wealth-X said. Moreover, around 40 percent of respondents said majority of their clients came from North America, 25 percent stated that the majority of their UHNW clients were from Asia, while 22 percent reported that the majority of their client base came from Europe.
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