The luxury goods sector is one of the fastest-growing industries worldwide, with significant growth in demand being seen in emerging markets. With economic stagnation impacting consumer sales in the established markets of Europe and North America, designer brands have been targeting the rapidly growing middle classes of China, India and other developing economies, which are developing a taste for high-class fashion labels, champagne and other luxury goods.
Traditional markets are cooling
Since 2008, the once-booming luxury goods market has cooled significantly in the traditional sales locations of Europe and North America, contributing to total growth of just 6 per cent between 2005 and 2010, compared with 43 per cent in emerging markets. The slowdown is being blamed on weak demand in the west, where consumers are being weighed down by slow economic growth and rising unemployment.
The China effect
Emerging markets are fast-replacing developed countries as the main target market for luxury goods retailers. China has seen the largest surge in sales growth in recent years and is forecast to account for about 46 per cent of the global market for luxury goods by 2025. Chinese sales of clothing, perfumes and other high-end goods are growing by an average of about 20 per cent a year, reflecting the rising living standards and disposable income of the country's rapidly-expanding middle class. Besides designer labels, consumers are also spending more on luxury services such as spas and fine dining.
"Made in Europe" brands still dominate
While the spending power may be shifting, the "authentic" European fashion labels still hold the biggest value internationally. Established brands such as France's Louis Vuitton, Italy's Prada and the UK's Burberry are able set their own pricing structures and make up the high-end goods market from Shanghai to Sao Paolo. This is especially true in emerging markets where prices for luxury goods are often significantly higher than those charged in Europe, despite median incomes being lower.
Luxury goods for the masses
Many luxury brands have enjoyed an expansion in their consumer base as growing numbers of middle class consumers worldwide have developed a taste for high-end goods. Expensive fashion, jewellery and foods - which were once the preserve of the upper classes - are now being purchased in ever-greater quantities by earners from the middle-income bracket. This is due in large part to growing numbers of middle class consumers in developing countries such as China, India and Brazil, while in the west increasing numbers of those from the baby boomer generation are reaching retirement age and have high levels of disposable income. While this is good news for the luxury goods market in terms of overall sales growth, some companies have experienced a devaluing of once niche-market brands. Take Burberry, the UK clothing brand, which has found itself associated with "chav" culture in recent years.
Total assets: £38.9 billion
Louis Vuitton MoÃ«t Hennessy (LVMH) is the world's largest producer of luxury goods. The company owns more than 50 brands, including Louis Vuitton and Dom Perignon champagne. The LVMH group made a profit of â‚¬2 billion (£1.4 billion) on sales of â‚¬12 billion in 2003.
Total assets: £20.2 billion
PPR's luxury-goods division is a world leader in the leather goods, shoes, watches and jewellery sectors, and the company owns several well-known brands including Gucci, Yves Saint Laurent and Stella McCartney.
Total assets: £9.3 billion
Richemont is the second-largest luxury goods company in the world by turnover and has significant interests across the fashion, jewellery and watch-making sectors. Among its most famous global brands are jewellery firm Cartier and women's fashion firm Chloé.
Total assets: £2.6 billion
HermÃ¨s is one of the world's longest-standing luxury goods firms and has a significant global presence in areas including leather goods, women's fashion and perfume. The company reported a 22 per cent growth in sales in the first quarter of 2012.
Total assets: £1.6 billion
The Burberry brand includes high-end clothing, perfume and accessories. The company has 500 stores across 50 countries and posted revenues of £1.9 billion in 2011.
Total assets: £2.3 billion
Prada is undergoing a massive expansion programme and opened 65 new stores in the 12 months ending April 2012, many of these in Asia. This expansion has led to significant growth, with the company reporting a 42 per cent increase in sales in the first quarter of 2012.
Total assets: £3.3 billion
The Ralph Lauren brand is one of the world's most established clothing labels and also has a significant presence in the perfume, homeware and footwear sectors. The company has 631 stores worldwide.
Estée Lauder companies
Total assets: £4.2 billion
Estée Lauder is a leading producer of make-up, skincare, perfume and clothing and owns 27 brands, including Tommy Hilfiger and American Beauty.
*Qatar buys into UK handbag brand (***August 2012)
Qatar Luxury Group buys a £27 million stake in UK-based handbag manufacturer Anya Hindmarch.
French/Scottish beverage link-up (July 2012)
French drink manufacturer Remy Cointreau buys Scotland's Bruichladdich Distillery, a malt whisky producer, for £58 million.
Qatar buys Italian fashion house (July 2012)
Mayhoola for Investments S.P.C., an investment firm owned by the Qatari royal family, acquires Italian fashion house Valentino from UK private equity firm Permira for £556 million.
Dubai conglomerate buys Italian fashion label (February 2011)
Dubai-based retail conglomerate Paris Group acquires a controlling stake in Italian fashion label Gianfranco Ferre.
Chinese firm buys Italian menswear brand (December 2010)
Chinese-owned clothing firm Trinity Ltd buys Italian menswear brand Cerruti for $44.3 million (£27.5 million).
Qatar buys UK luxury department store (May 2010)
London-based luxury department store Harrods is bought by Qatar Holdings, an investment company owned by the Qatari royal family, in a deal worth £1.5 billion.