Despite the global economic downturn, the slowdown in global tourism and unfavourable trading conditions generally, Generation Research?s latest data shows that Luxury Goods companies closed 2009 with only a -6.3% decline in sales, as compared

to 2008.

‘The loss in retail sales of totally some US$ 800 million can all be found in Europe and the Americas? regions that were particularly hard hit in 2009’, said Yngve Bia, President Generation Research.

Research results show that Asia Pacific continued to advance, recording a growth in duty free luxury goods sales of +3.7% reaching nearly US$ 4.2 billion. ‘Asia Pacific is already the most important market for companies in the Luxury Goods sector, making up well over one third of global duty free and travel retail sales’, said Bia.

‘The growing importance of Asian customers should not be underestimated’, he continues. ‘Traders in the field suggest that 80-90% of the sector?s growth in the coming three years will be found in Asia and emerging markets’.

In 2009, shops in Asia located at typical and popular destinations for the Japanese suffered a decline in luxury goods duty free sales, including sales in Japanese airport stores that were also affected by the strong Japanese Yen. ‘Today Japanese travellers have a limited budget, the OL [young Japanese Office Ladies, Ed?s note] segment of the market has eroded significantly over the past 10 years and so also the omiyage [gift-giving, Ed's note] tradition. Today, the Japanese buy more for themselves’, says Bia.

The overall Asia Pacific luxury goods business in duty free was, however, somewhat compensated by the growth in Chinese outbound tourism. In 2010 the Chinese are expected to continue to increase their shopping expenditure when overseas by +14.0% reaching US$ 3.4 billion, an important part of that in the world's duty free and travel retail shops.

Meanwhile, the business generated by South Korean travellers suffered throughout the year and this was mainly due to the weak Korean Won, although this business has recovered somewhat towards the end of 2009.

Whilst sales of Watches recorded a double-digit decline on a global basis, sales of Fashion and Leather goods rose well above the rate of the product group average of -6.3%. ‘We see that these two categories actually grew sales by about +5%, with Louis Vuitton again being a star performer, recording a double-digit growth’, says Bia.