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Italian fashion houses see 2011 as key test for recovery
By Antonella Ciancio MILAN |
By Antonella Ciancio MILAN (Reuters) - The luxury industry will only see in 2011 whether a full recovery is under way, Italian fashion representatives said this week, with one predicting global sales could double in the next 10 years helped by emerging countries.
Italian fashion houses such as Prada and Ferragamo have forecast a higher 2010 after reporting double-digit revenue rises in the first quarters, driven by booming China.
However, many said they could not predict whether the market would return to pre-crisis levels next year.
"2011 will be a test year for fashion houses," Marco Bizzarri, President and Chief Executive of Bottega Veneta told Reuters on the sidelines of their spring/summer 2011 show.
"It is easier (to see a recovery) when we compare results with 2009, which was a tough year for the sector," he said.
Bottega Veneta, part of French retail and luxury giant PPR's Gucci Group, has grown from a niche maison into a global fashion brand, with revenues of 402 million euros ($536 million) in 2009, in line with 2008.
Armando Branchini, secretary general of Italy's luxury goods association Altagamma, said the sector could reach pre-crisis levels next year if the upward trend continued.
"If consumption of luxury goods rises 15 percent at the end of 2010, we won't be far from the record peaks seen in 2007 and early 2008," Branchini said.
"If not in 2010, we could return to pre-crisis levels in the first half of 2011," he said, adding longer life expectancy, women's increased power spending and rising demand from emerging countries could help the sector double its size over 10 years.
"We expect buyers from emerging countries to account for 50 percent of global luxury spending by 2020, adding to those from mature markets who will continue to spend," he said.
Buyers from Brazil, Russia, India and China snapped up around 30 percent of global luxury goods in 2009, he said.
Giorgio Armani, whose diversified empire reported a 6 percent drop in revenues to 1.5 billion euros in 2009, better than most its peers, has said he sees promising signs for 2010, on both emerging and mature markets.
"The crisis has made us more realistic," he told reporters after his Emporio Armani show, where he proposed half heels and stretch tulle skirts for "women who are not all mannequins."
Italian fashion house Versace, which releases its first-half results next month, has said it expects revenues to grow 4.4 percent to 280 million euros in 2010, with the last three months to remain stable.
"However, it is very difficult to predict when sales will go back to pre-crisis levels in western countries," Versace's Chief Executive Gian Giacomo Ferraris told Reuters.
"Our feeling is that the crisis has permanently changed consumers' perception of what constitutes value for money," he said.
(Reporting by Antonella Ciancio, Editing by Sanjeev Miglani)
(For more news, visit Reuters India)
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