Chinese and U.S. shoppers with a taste for the finer things in life could help the luxury goods sector shrug off the hit from the global health crisis this year.
That's according to Bain.
The consultancy firm said on Monday (May 17) that it now sees a 30% probability that sales of high-end handbags, clothes and jewelry will this year return to or exceed their 2019 level of $340 billion.
But it still depends on progress in tackling the health crisis, and how fast tourism picks up.
Luxury goods sales fell by 23% last year, their largest-ever drop and the first decline since 2009.
That was due to forced shop closures and a halt to international tourism.
But the crisis does not seem to have had a lasting impact on consumers' appetite and spending power for high-end wares.
Soaring sales in China, the biggest market for luxury goods, and a stronger-than-expected U.S. rebound thanks to a major stimulus program have helped revenues bounce back sharply in the first quarter of 2021.
Big names including LVMH and Hermes are already back above 2019 levels as a result.
Though smaller labels like Ferragamo and Tod's still have to catch up.
Europe is lagging behind other regions, hampered by lingering lockdowns and restrictions on tourism.
The crisis has forced brands traditionally more reluctant to sell online to fully embrace e-commerce, which looks set to become the leading channel for luxury purchases in the coming years.
And while handbags, leather goods and jewelry have been driving the recovery, spending on clothes, makeup and perfumes is also expected to pick up as lockdowns ease and people resume going out.