At this year’s holiday soirées luxury bosses may be stingier than usual with the champagne. It has not been a sparkling six months for the industry, as well-heeled consumers from East to West have tempered the excesses of recent years. The S&P global luxury index, which tracks the industry’s performance, is down by 9% since the middle of the year. Still, the purveyors of splendour need not forgo the merrymaking altogether. The global market for personal luxury goods, from handbags to haute couture and horology, grew by 4% this year, reckons Bain, a consultancy. That is disappointing compared with 20% last year—but nothing to scoff at amid fears of a slowing global economy.
The past two decades have been remarkable for the industry. Global sales have tripled to nearly $400bn, thanks largely to a swelling of the ranks of crazy rich Asians. The biggest beneficiaries of the boom have been European companies. These account for around two-thirds of luxury-goods sales, according to Deloitte, another consultancy, and nine of the world’s ten most valuable luxury brands, according to Kantar, a market-research firm. Bernard Arnault of LVMH, a European luxury goliath, is the world’s second-richest man. The industry remains a rare bright spot for Europe at a time when the continent seems at risk of fading into economic and technological irrelevance. Why has it been so immune to foreign competition?