UK luxury sector forecast to almost double in size

- The UK luxury sector set to grow 12% in 2013 to £7.4 billion

- British luxury brands remain optimistic about the outlook with 83% of brands expecting to see a rise in sales in 2013

- Brazil and India are key target markets for UK luxury brands looking to expand overseas

- Only 13% of brands currently have operations in Brazil however, with the Olympics and World Cup coming up, 52% of brands have an interest in entering the market

- Manchester & Edinburgh are considered to be the UK’s next most important luxury hubs, after London

Now in its fourth year, the report is the most comprehensive analysis of the UK luxury industry and covers the performance, expectations and issues facing leading luxury brands in the UK and internationally.

The study reports that the UK luxury industry is set for strong growth, despite a difficult environment in Europe, with the sector predicted to see double digit growth, annually, for the next five years. British luxury brands remain optimistic about the outlook with 83% of luxury brands expecting to see a rise in sales in 2013. 

Whilst London remains the leading hub for luxury sales, 81% of luxury brands have a presence outside the capital. The South East and North West remain the next largest regions. Manchester is the city that had the strongest luxury sales outside of London in 2012, according to 24% of respondents. This was followed very closely by Edinburgh, and the research also found robust demand for luxury in cities such as Birmingham, Glasgow and York.  

Tourist shoppers remain crucial to the British luxury industry. 64% of respondents will target this group specifically through various initiatives including introducing foreign payment methods, such as Union Pay and hiring foreign speaking staff.  Whilst Americans remain the most important nationality of luxury visitors to the UK, the Chinese are considered the fastest growing group of luxury shoppers to the UK.

Key potential growth for UK luxury brands is seen in the BRIC economies (Brazil, India, Russia and China).  Only 13% of British luxury brands have operations in Brazil, but with the Olympics and World Cup coming up, 52% of brands have plans to enter the market. 

India also remains a key target market for UK luxury brands, only 23% of British luxury brands are currently present in India however over 50% have interest in entering the market in the long term.  The biggest challenges facing luxury brands looking to enter India are the lack of infrastructure, understanding of local business culture and the local regulatory environment.