The UK luxury sector will almost double in size over the next five years, according to the annual Ledbury Research and Walpole Luxury Benchmark study.
The study forecasts that the UK luxury sector will go from £6.6 billion in 2012 to £12.2 billion in 2017.
According to the expectations from British luxury specialist Walpole, the UK luxury sector is set to grow 12% in 2013 to £7.4 billion. The results were upbeat, with British luxury brands remaining optimistic about the outlook and 83% of brands expecting to see a rise in sales in 2013. Additionally, the study found that after London, Manchester and Edinburgh are considered to be the UK’s next most important luxury hubs.
The findings come from the report, which is now in its fourth year. A collaboration between the not-for-profit organisation Walpole British Luxury, which represents the UK luxury industry and leading British luxury brands including Burberry, Harrods, Jimmy Choo and Maybourne Hotel Group, and Ledbury Research, a market research firm that specialises in the luxury sector, the annual UK luxury benchmark study addresses senior luxury executives in the UK.
Walpole chief executive Julia Carrick said: “We are delighted to be collaborating with Ledbury Research on the UK luxury benchmark study, for the fourth year running. The findings from this year’s study provide an insightful look at the changing landscape of the UK luxury industry and the key priorities and challenges facing senior luxury executives in the coming year. Despite the backdrop of the Eurozone crisis and a difficult economic environment, the UK luxury industry remains extremely robust and is forecast to grow significantly in size."
This year’s findings also revealed Brazil and India as key target markets for UK luxury brands looking to expand overseas. Although just 13% of brands were found to currently have operations in Brazil, the association with the next Olympics and World Cup, has resulted in 52% of brands reporting an interest in entering the market.
India also remains a key target market for UK luxury brands, only 23% of British luxury brands are currently present in India but over 50% have interest in entering the market in the long term.
Additionally, the study found that digital innovation remains a top priority for UK luxury brands in the coming year, nearly double the respondents involved in the study will invest in m-commerce this year, compared to 2012.
Looking ahead, the two most important challenges facing British luxury businesses in 2013 were indicated as maintaining product quality and reaching the next generation of consumers. Almost all of the surveyed brands (98%) said that reaching the next generation will be a challenge to some degree.