Mintel’s Luxury Goods Retailing – International, August 2014 includes Mintel’s proprietary global market size and forecast, as well as bringing together key operating statistics for leading luxury companies.

The report is concerned just with luxury products and not with other aspects of luxury which fall outside our strict retail definition, such as Cars, Holidays and Art.

The report also includes findings from Mintel’s exclusive consumer research carried out across seven major markets: the UK, the US, France, Germany, Italy, Spain and China. This proprietary data provides valuable insights into attitudes and buying habits related to luxury goods in the major markets.

The report includes profiles of 16 leading luxury companies, spanning the categories that are the focus of this report: watches and jewellery, apparel and leather goods, and fragrance and cosmetics.

Luxury goods are unusual in the retail context in that there is growing vertical integration in the sector. But more than that it is the products and brands that are luxury, rather than the retailers. The major luxury groups are taking a greater control of their retail outlets and the practice of wholesaling and licensing is very much in decline.

The Mintel market size is calculated from the aggregated turnover of these luxury brands, adjusted where necessary to add a retail margin and the sales of smaller players.

The concept of luxury goods is inevitably highly subjective. It is usually obvious where a product is luxury and equally obvious where it isn’t, but there is a grey area between which is more subjective. Take the Swatch group, for example. Swatch itself is clearly mass market and, while they are more upmarket, we think that Longines and Tissot are too. But Omega is a luxury brand, and one of the more desirable as well.

The term “luxury” usually carries with it the idea that there is a very high level of craftsmanship involved and that the products carry a high price so that they are out of the reach of most mass market buyers. Unfortunately they can also carry connotations of ostentation and even “bling”. Many are for people who want to appear richer than they actually are. (An issue which is beyond the scope of this report to investigate is – how many of the genuinely super-rich actually buy luxury goods?)

In our analysis there are three main categories of luxury goods to which we add a miscellaneous group of smaller products:

• Fashion & leather goods

• Fragrances & cosmetics

• Jewellery & watches

• Other – writing instruments, eyewear, furniture and other home goods and other miscellaneous items. It may also include a small element from hotels (eg Bulgari), spas and bars.

Food, beverages, tobacco, electronic/electrical goods, automobiles and services such as travel are all excluded.

We provide a broad regional breakdowns of our market size. This is based mainly on data published by the leading luxury groups themselves.

• Europe

• Americas

• Asia-Pacific

• Rest of the world (includes the Middle East and Africa).

We then further estimate national market sizes for the ten largest markets, which together account for around three-quarters of the global market.

All sales figures and luxury goods market sizes are quoted excluding VAT, unless specifically stated otherwise. All consumer spending data is quoted including VAT, unless specifically stated otherwise.

Operating profit is trading profit after normal operating costs and depreciation, but before interest, goodwill amortisation and exceptional items. Pre-tax profit is calculated after all costs, including exceptionals, interest, and non-cash charges such as amortisation, but before tax.

Note that there can be a number of reasons why tables do not sum exactly:

• Rounding errors

• Currency conversions if original data for different subsidiaries was in different currencies (companies sometimes provide information in local currencies)

• VAT (sales tax) – if original data was provided gross (including sales tax), we have extracted VAT at the relevant rates for countries concerned and at the estimated appropriate rates depending on product categories sold.

The euro and the US dollar are the main currencies used in this report and the average annual exchange rates used for the period 2008-12 are shown below. However, in some cases, average exchange rates will have been matched to company year-ends and not necessarily calendar year-ends in the company profiles.