If gloomy has become a byword for the global situation of the past few months, it doesn't seem to apply to most global luxury retailers. Their dictionaries apparently don't contain recession and caution either, as they have seen sales grow at a healthy clip. Analysts predicting a tightening of purse-strings were caught rather by surprise.

Strong growth

Just last week, UK-based luxury fashion group Burberry reported a 30 per cent rise in revenues to GBP 830 million for the six months ended September '11. It pegged comparable same-store sales growth at a high 16 per cent, and remained quite upbeat about the future. It even forecast a mild improvement in operating margins.

The CEO of PPR, which owns high-end brands such as Gucci, Yves Saint Laurent and Stella McCartney, saw no signs of a slowdown, saying that luxury sales in the US department stores were posting good figures while terming European buoyant. It's an opinion shared by LVMH, whose brand portfolio includes Louis Vuitton, Givenchy, Donna Karan and Bulgari among others.

The company is building up its presence in Asia to tap its growing ranks of the wealthy, with Japan and China featuring at the top of the list. Though Indian shores are being eyed by the luxury giants, uncertainty over foreign investments in retail with policymakers, retailers and traders battling over regulations could prevent an aggressive ramp up in presence.

Across the Atlantic, amidst worry over jobs-data and debt in the US, high-end fashion retailers Nordstrom and Saks Fifth Avenue blew away their sceptics. Nordstrom's preliminary figures for the September '11 quarter showed a growth of 16 per cent in revenues. Saks reported a same-store sales growth of 9.3 per cent for the month of September, up from the 6.1 per cent in August.

Across the board

And its not just fashion houses which are going strong. Car-maker BMW Group reported a record September month, selling 159,214 vehicles, up 11 per cent compared to September '10. It was also one of the most successful periods for the company, notching up a sales growth of 16 per cent for the first nine months.

Swiss-based Richemont Group, which is behind luxury watches and writing instrument brands such as Cartier, Piaget and Montblanc, also beat analysts' estimates and posted a 29 per cent growth in sales in the April-August '11 period, buoyed by demand in China, though the European and American regions too showed strong growth. Richemont, however, was only cautiously optimistic over performance for the rest of the year, citing difficulty in predicting the effect of the Euro zone fiscal deficits. Meanwhile, jeweller Tiffany & Co beat market, and its own, expectations for the July'11 quarter, with revenues climbing 30 per cent. The company upped its guidance for the rest of the year as well.

The global slowdown that began in 2008 had seen many a luxury player cutting costs, offering discounts and scaling down. Demand fell as stock markets crashed, taking the money of its elite shoppers alongside. This time around, this ‘wealth effect' has not taken hold, with shoppers willing to pay for quality. With holiday season just around the corner, the luxury sector may continue to party right on.

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