Luxury brand sales have been hit especially hard by this recession. Since people are so worried about paying their bills, that in turn makes expensive jewelry and high end hand bags seem frivolous and unnecessary. Luckily, some high end brands have had success internationally.
Luxury brands are becoming more and more successful in Asia as compared to North America. With the holiday season in full swing, numbers are pouring in for retailers; however, some are doing better than others. Tiffany & Company sales declined nine percent in the United States, while sales in Asia rose ten percent. European sales climbed twelve percent as well. Because of this success internationally, Tiffany’s sales are exceeding expectations for this quarter, despite the low American numbers. They are also doing things to help alleviate some of the financial strain, such as inventory cut backs and controlling general and administrative expenses.
Recently, Chinese luxury brands have expanded a lot too. China now accounts for over one quarter of the world’s market, which makes it the largest luxury goods market in the world. The Chinese seem to appreciate the quality of these luxury brands. They generally will not buy the cheaper imitations, even though China is where most of the knock offs are produced. Will China continue to grow and dominate the luxury goods market, or will things begin to balance out?