A combination of globalisation and economic buoyancy in the developing countries is helping sustain sales of luxury goods including cosmetics with overall luxury goods sales reaching E159bn in 2006 - an increase of 9% over the year earlier. Growth in 2007 is expected to remain "solid" with sales rising by between 7% and 9% if exchange rate factors are discounted.
These are the main conclusions of a study of the sector by the Bain consultancy for the Altagamma association, a grouping of 57 Italian luxury goods companies.
However, Leonardo Ferragamo, president of Altagamma, said the strong euro this year will have a negative effect and could cost as much as 3% to 4% on annual sales. Bain suggests the euro factor could almost halve current growth. The Bain report notes that perfumes and cosmetics are as it were on the edge of the luxury products market at the point where it merges into the mass market but points out that it is cosmetics and perfumery products which "initiate" or introduce consumers in the newly emerging markets to luxury products.