ROME (Dow Jones)--Luxury goods sales are expected to rise 8% in 2011 to EUR185 billion, as shoppers in fast-growing markets like China and Russia quench their appetite for high-end handbags and clothes, said a Bain & Company study released Tuesday.
The study, presented by Italian luxury association Fondazione Altagamma, said growth in 2011 is expected to be slower than the 12% rise to EUR172 billion experienced in 2010. In 2010, the luxury industry rebounded from 2009--a year that Altagamma refers to as the "annus horribilus."
Worldwide, the luxury goods market's compound annual growth rate is seen at about 5% to 6% in 2011 to 2014.
Luxury's biggest players posted buoyant sales in the first-quarter of the year. Companies like France's PPR SA (PP.FR) reported a 9.1% rise in sales to EUR3.71 billion in the first quarter, while LVMH Moet Hennessy Louis Vuitton SA (MC.FR) reported a 17% jump in first-quarter sales to EUR5.25 billion.
China revenue was a key driver for Italian luxury makers like Bulgari SpA (BUL.MI), Prada SpA and Salvatore Ferragamo SpA.
Mainland China will continue to be the most rapid growing market for luxury and will rank as luxury goods' third-largest market in five years, Bain said. In 2011, China and the rest of Asia Pacific are expected to stage double-digit growth, rising 25% and 15% respectively.
Japan, a market that has been struggling since 2007, is expected to slide 5% this year as the nation recovers from the March 11 earthquake and nuclear crisis that shut Tokyo stores for 10 days, Bain said.
"First signs of recovery are expected already from the third quarter, also fueled by growing GDP due to the reconstruction," Bain said.
In a separate study, Altagamma said that by sector, leather goods, shoes and accessories are expected lead gains, rising 12.5% in 2011, followed by the jewelry and watches sector, which is expected to rise 11.5%.
On the whole, the luxury sector's earnings before interest, taxes, depreciation and amortization, or Ebitda, should rise 13% in 2011 compared to a year earlier, Altagamma said.
Rising US golf star Dustin Johnson on Wednesday insisted the search for a new caddie was not distracting him from his game after splitting from his bag-man of three years.
The big-hitting 26-year-old dropped Bobby Brown last week and admitted their close friendship may have got in the way of their performance on the golf course.
Johnson said he would take his time to find a permanent replacement for Brown, and he will tee off at the Ballantine's Championship in South Korea this week with a caddie from his club manufacturer TaylorMade.
"The search for a new caddie's been going really good," he said.
"I've got a lot of guys interested in working for me, I've got a few different ones lined up for the next few weeks. It hasn't really been a distraction at all."
Brown was on Johnson's bag when he threw away good chances to win two Majors last year, but the player said they remained good friends despite the split.
A triple-bogey on his way to a final round of 82 saw Johnson surrender a three-shot last-day lead at the US Open at Pebble Beach and slump to finish outside the top 10.
At the PGA Championship he led Germany's Martin Kaymer by a shot going into the last hole of a playoff when he failed to realise he was in a bunker and grounded his club, incurring a two-stroke penalty.
"I'll be looking for somebody I get along with on the course and enjoy spending time with, but as far as Bobby goes we're still going to be really close friends," he said.
"He's kind of like a brother to me and I think that was one of our faults -- maybe we're a little too close."
The $3.2 million Ballantine's starts on Thursday at the Blackstone Golf Club near Seoul, and Johnson faces a strong field that includes world number one Lee Westwood, three-time Major winner Ernie Els and Asia's first Major-winner Y.E. Yang.
Santa Clara County supervisors have passed a ban on plastic bags that will go into effect Jan. 1 in unincorporated areas of the county.
The ban is the fifth to be passed in the United States this year.
The board said the measure will affect 56 retailers who hand out an estimated 32,000 plastic bags annually. There is an exemption for plastic newspaper bags and for restaurants, non-profit groups and social organizations that hand out plastic bags. The ban also will require that retailers charge at least 15 cents for paper bags in an effort to influence shoppers to use reusable bags.
The ban was passed by a 4-1 vote with board member Mike Wasserman — the former mayor of Los Gates — dissenting. There was no opposition to the bill at the April 26 hearing.
In Oregon, a bill that would ban plastic bags and require retailers to charge five cents for paper bags is currently stalled in the Senate Rules Committee after passing out of the Senate Environmental and Natural Resources Committee last week.
Earlier this month, Newport Beach declined to enact a bag on plastic bags, citing potential litigation issues.
Twenty U.S. communities in the U.S. have plastic bag bans, and Washington, D.C., has a 5-cent fee on paper and plastic carryout bags.
Christie's auction house says Wednesday the boxy black leather Asprey bag will be sold on June 27 at an auction hosted by author Jeffrey Archer.
The bag was on Thatcher's arm during Cold War negotiations with former U.S. President Ronald Reagan and Soviet Union leader Mikhail Gorbachev.
The former Conservative leader was famously responsible as the origins of the word "handbagging," which referred to her uncompromising style.
The auction house says Thatcher has selected to donate the proceeds of the sale to a British charity working with people with a genetic skin condition.
What is more, it doesn't seem to matter how many times an area is damaged as it can be tricked into repairing itself time and time again, researches at the Case Western Reserve University in Cleveland claimed.
This breakthrough, according to them, would make the "metallo-supramolecular polymer" a boon for motorists who have trouble parking, as well as for women who find their new shoes get scuffed within hours of using, the Daily Mail reported.
Handbags, furniture, windows, wooden floors, punctured tyres and even spectacles could all be made as good as new, sparing customers the time money and frustration involved in fixing cuts, scrapes and scuffs, the researchers said.
Lead researcher Professor Stuart Rowan said: "What we have developed is a new plastic material composed of very small chains that stick together and assemble into much larger chains.
"What we have designed into the material is the ability to disassemble on exposure to light. When it disassembles, the material flows into the crack and the system gets healed."
The "ingenious and transformative" plastic, according to the researchers, is made up of long chains of hydrocarbons "glued" together by tiny plugs of metal.
When UV light is shone on it, the metal generates heat and the surrounding plastic melts -- oozing into any scratches or scuffs. In tests, detailed in the journal Nature, deep scratches made with a razor blade took less than a minute to close up.
When the light was switched off, the plastic coating solidified again and appeared as good as new. The researchers have likened the process to the skin healing over a cut, leaving no trace of the injury. But in this case, there is no need for stitches and the transformation takes seconds rather than days or weeks.
Working with military researchers and Swiss chemists, Professor Rowan showed that the same piece of material could be scratched and mended again and again without any ill-effects.
He used a lamp similar to those used by dentists to cure fillings. But in time, car washes could be equipped with UV lamps, meaning that vehicles emerge with paintwork that is flawless, as well as polished.
Although self-healing plastics have been created before, most used powerful blasts of heat to kick-start the repair process. Using UV light makes it faster, easier and more accurate, said fellow researcher Mark Burnworth.
"By using light, we have more control as it allows us to target only the defect and leave the rest of the material untouched," added Burnworth.
HONG KONG — Few things epitomize the burgeoning affluence and consumerism of the swelling middle class in mainland China as well as the soaring sales of luxury handbags, cars, and shark fin soup. Yes, shark fin soup.
Once a delicacy confined to the upper echelons of Chinese society, the pricey soup is considered a must-serve at the lavish banquets that mark big occasions like weddings or corporate celebrations. And thanks to the galloping economic growth China has achieved since the 1990s, the soup is within the financial reach of millions of newly prosperous people.
The result has been severe overfishing. Scientists estimate that many millions of sharks are killed every year, primarily for their valuable fins.
Add to that the fact that these creatures reproduce slowly, and you get a sharp decline in global shark populations, to the extent that some scientists say about 30 percent of all shark species are in danger of extinction. And because sharks are at the top of the food chain, their declines have a profound effect on the balance of marine ecosystems.
Clearly, we have a problem. So the fact that shark fin soup is losing its appeal in Hong Kong is at least a snippet of good news.
A survey of about 1,000 Hong Kong residents, published here earlier this month and believed to be the most in-depth study of its kind to date, showed 78 percent of respondents considered it “acceptable” to leave shark fin soup off the menu at events like weddings.
That is a pretty surprising majority, considering the dish’s tremendous status-symbol appeal. Moreover, since nearly 90 percent of the soup is consumed at such set-menu affairs, this shift is an important sign that actual consumption in Hong Kong could be waning.
Commissioned by Bloom, a nongovernmental organization that aims to protect vulnerable marine species, and conducted by the University of Hong Kong, the survey found that 89 percent of respondents understood that shark populations were declining.
Although 58 percent of respondents said they had made no change to the amount of shark fin soup they had consumed over the past five years, more than a third said they had cut down.
Hong Kong is not a key player in the actual fishing of sharks. The list of top fishing nations includes Argentina, France, India, Indonesia, Spain and the United States, according to a report by the wildlife monitoring network Traffic and the Pew Environment Group, published in January.
But the city is the main hub for the world’s shark fin trade. About 9,000 tons of fins, worth hundreds of millions of dollars, are imported each year, according to government statistics. So what happens in Hong Kong matters globally.
Encouragingly, attitudes also appear to be shifting in the vastly bigger mainland market, according to Peter Knights, executive director at WildAid. For the past few years, the organization has been running anti-shark-finning campaigns on the mainland featuring Yao Ming, the Shanghai-born National Basketball Association star, among others. It also plans to run a national awareness week, in conjunction with the Chinese Fisheries Ministry, in June.
“The fact that we’re allowed to do all this campaigning, and with the aid of state media, is a clear sign that the authorities are condoning the message,” Mr. Knights said by phone from San Francisco.
In another sign that the topic is getting top-level attention, a deputy of the National People’s Congress in Beijing, Ding Liguo, filed a proposal last month to ban trade in shark fins, according to a report from Xinhua, the state-run news agency.
“Only legislation can stop shark fin trading and reduce the killings of sharks,” Mr. Ding said, adding that the mainland, Hong Kong and Taiwan consume 95 percent the world’s fins.
The United States also has been taking steps to counter the shark trade in recent months: state legislatures in California, Oregon and Washington have introduced bills to ban possession of shark fins and trade in them, said Michael Skoletsky, executive director at Shark Savers in New York.
But let us not get overly optimistic.
Shark fin soup remains firmly ensconced on the menus of many top restaurants in China, including those of several international hotel chains. I still regularly hear of shark-fin soup being served at official or corporate events, and of wedding couples whose desire not to serve the dish has been overruled by their relatives. Every day, my journey to work in Hong Kong takes me past shops selling thousands of dried fins.
“The fundamental problem is that too many sharks are still being killed,” said Mr. Skoletsky of Shark Savers.
Traffic and Pew, in their January report, sharply criticized the world’s top fishing nations for doing too little to protect sharks. “The fate of the world’s sharks is in the hands of the top 20 shark catchers, most of whom have failed to demonstrate what, if anything, they are doing to save these imperiled species,” the authors wrote.
The Hong Kong government, meanwhile, merely prohibits trading in three shark species protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, or CITES, rather than the far larger number of species that scientists say are threatened.
But people in Hong Kong favor action to protect sharks. Nearly 90 percent of respondents in the Bloom survey said Hong Kong should ban the sale of products that involve killing endangered species. A similar proportion supports a prohibition of shark fin imports into Hong Kong.
Still, campaigners say they are deeply worried that change is coming too slowly.
Moreover, the shift in awareness about sharks does not necessarily extend to the many other finite resources — other animals, or materials like wood, oil and coal — that are under pressure from rising demand from industrialized economies and fast-growing countries like China.
“There needs to be a fundamental shift in our attitudes to natural resources in general,” said Yvonne Sadovy, a professor and fisheries expert at the University of Hong Kong’s School of Biological Sciences.
As for sharks, the trade in their fins is ultimately going to end, said Mr. Knights of WildAid. “The question is, will it end while we’ve still got some sharks left?”
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