Despite a slowdown in the global economy, the world's 75 largest luxury goods companies generated luxury goods sales of $171.8 billion through the end of last fiscal year (fiscal years ended through June 2013), according to the inaugural Global Powers of Luxury Goods report issued by Deloitte Touche Tohmatsu Limited.
"Despite operating in a troubled economic environment, luxury goods companies fared better than consumer product companies and global economies generally. For the remainder of this year, we expect growth in developed economies to pick up speed while significant risks in emerging markets remain," said Ira Kalish, chief economist, Deloitte Global. "Overall performance of the luxury sector will depend not only on economic growth, but on factors such as volume of travel, protection of intellectual property, consumer propensity to save, and changing income distribution."
In the report, LVMH is the No. 1 ranked company.
The report focuses on the high concentration of luxury goods companies headquartered in France, Italy, Spain, Switzerland, the United Kingdom and the United States. These six countries represented nearly 87 percent of the Top 75 luxury goods companies and accounted for more than 90 percent of global luxury goods sales in 2012. France, Italy, and Switzerland achieved strong composite luxury sales growth in 2012, with France and Switzerland outpacing the 12.6 percent composite growth for the Top 75 at 19.4 percent and 14.8 percent, respectively. Italian luxury goods companies grew in tandem with the Top 75 at 12.4 percent. Countries trailing the Top 75 composite were Spain, the United Kingdom and the United States, with the United States having the smallest growth at just 5.6 percent.
Growth of wealthy and upper middle class consumers in emerging markets has been the biggest driver of M&A activity in the luxury and premium goods space in recent years. Asia Pacific, Latin America, and the Middle East and Africa accounted for a combined 19 percent of the luxury market in 2013 and the regions are projected to grow to 25 percent in 2025, according to Euromonitor.