According to Mintel’s definition, based on the leading luxury goods companies, the global luxury goods market was worth an estimated €70.0 billion (US$87.5 billion) in 2005, up 9.2% on 2004. This increase comes despite a further strengthening of the Euro against the dollar during 2005.

The main focus of development in terms of distribution is retail, with many of the leading luxury companies looking to dramatically expand their own store networks, whilst cutting back on franchise and (market) licensing deals. The main attractions of retail for the leading luxury companies are higher margins and greater control of how, when and where their products are sold. Companies appear to be overcoming previous concerns with regard to brand control and counterfeiting as they plunge headlong into the Chinese marketplace. The opportunity that China represents is too great for the leading luxury players to ignore, with a rapidly growing economy that is increasing consumer wealth and creating literally millions of new millionaires.

While Mintel anticipates that the strong growth experienced in the first quarter of 2006 will slow slightly during the rest of the year, a strong growth of 11% is forecasted for 2006. Mintel expects growth to slow in 2007, but looking at the longer-term trend, the market will grow by approximately a third in the period to 2010.