Luxury/Lifestyle sector

Although many luxury brands have existed for decades or even for over a century, the luxury goods sector, as a stand-alone and recognized stock market industry category, is still relatively new, with many of the listed players having come to the public markets only in the last decade.

As a category, "luxury" has experienced considerable growth in terms of global sales: luxury retail sales expanded from approximately €75bn in 1995 to nearly €175bn in 2007*. This was fuelled by an expansion in the consumer base and relevance of luxury products – and an increase in terms of participants and concepts within the luxury sector.

Globally, consumers are increasingly discerning – differentiating themselves and demanding a premium experience in terms of innovation, quality, heritage, design, and lifestyle symbolism. Meanwhile, luxury suppliers deftly synchronize exclusivity, appeal and availability, encouraging the globalization of the luxury market. As a result, "luxury" goods have broken into developing economies just as they have become relevant to new consumers within traditional markets.

Conceptually, what was previously seen as an incidental grouping within the fashion/apparel retail sector has now expanded into a lifestyle landscape to include:

• Apparel and accessories – fashion, jewellery and watches, footwear and leather goods

• Travel and leisure services – hotels, concierge services, food/restaurants, travel, property

• Beauty and well-being – spas, skincare, fragrances, safety/security

• Technology and design – home/personal entertainment, automotive, yachting, furniture, homeware, sports equipment

The low-debt, highly cash-generative nature of the luxury category will make it very attractive in the post-credit-crunch markets. However, the vital differentiator of the "luxury" sector is the entitlement, image and integrity of the brand. It is the fundamental thread linking lifestyle concepts and raising them to the status of "luxury". At Avista, our advisory strategy prioritizes our client's corporate strategy: we understand that any corporate strategy that does not put brand foremost in its priorities risks compromising the very heritage and authority on which the brand is based.

*based on luxury market research