Private equity investors expect fashion and luxury to grow 4 percent in 3 years

New York – Private equity investors surveyed by Deloitte forecast major players in the personal luxury goods industry – which is inclusive the luxury apparel - to achieve 1.1 times their 2018 sales index by 2021 (which means growing by 4 percent CAGR in the period comprehended between 2018 and 2021.)

Other luxury sectors are expected to achieve 1.2 times their value (approximately improving by 6 percent CAGR in the tree years to 2021.) These are some of the key findings of Deloitte’s Private Equity Survey 2019, which focuses on understanding investors’ perceptions of the potential growth in the fashion and luxury market in coming years.

Global luxury and apparel market to grow 5 – 10 percent annually until 2021

The consensus view is that within the next three years, the fashion and luxury industry will continue to grow by 5-10 percent annually. Apparel and accessories are consolidating (with expected annual growth of 5-10 percent), reveals this survey.

Investors’ positive consensus regarding both Asia and the Middle East has continued in 2019 as the forecast continues to see these regions stimulating the growth of the luxury fashion segment.

Expectations for North America are also positive, with forecast growth in line with that 5-10 percent annual growth range, despite sentiment decreased compared to 2018. In this regard, Deloitte highlights that sentiment regarding Europe, Latin America and Japan has changed compared to the previous year, but the regions are forecast to develop relatively stable.

Asia witnessed an increase in deals driven by the watches and jewellery sector

Europe was the only region which saw a significant increase of merges and acquisitions (M&A activity) within fashion and luxury markets in 2018, with 41 more deals registered, driven by an increase in the hotel business.

North America and Middle East presented a lower number of deals with respect to 2017. Luxury Hotel and Apparel deals were present in all major regions, and were notable drivers of M&A activity globally in 2018. Indeed, Asia-Pacific presented a slight increase in fashion and luxury deals since 2017, thanks to the watches and jewellery segment.

Photo:L Catterton Asia corporate website

 

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