Contrary to popular belief, the luxury sector does not perform badly when the economy is on a downturn. It is recession-proof, and actually does better. Sales CAGR for the 2007-11 period for Hermes has been at 15%, Gruppo Prada at 16% and LMVH at 9%. In fact, the last 3 years have seen immense growth, with the same companies recording CAGR of 22%, 27% and 18% respectively. In 2012 alone, the worldwide luxury market is estimated to have grown at 10%, with revenues reaching $275 billion. It is the third consecutive year that the Luxury sector saw a double-digit growth.
The growth has been driven by China dominated Asia-Pacific region, with 2012 growth rates at 18%. The Americas region is also a key driver, with growth estimated at 13%. Europe, reeling under a recession has grown slower than last year, but is still expected to have increased its luxury market by 5% in 2012. China is the key to the Global Luxury market. Not only do the Chinese buy a plethora of luxury goods at home, they spend a substantial amount on luxury goods as tourists. The Asian giant has actually overtaken Japan to become the #2 market after USA. One in four of the luxury goods purchased today is by the Chinese, and they are responsible for half of the luxury goods purchased in Asia, and one third of those purchased in Europe. Accessories are among the most popular luxury goods purchased, with just shoes and leather goods accounting for 27% of the market.
It is estimated that the market could grow to as much as $325 billion by 2015. E-Commerce, which grew at 25% in 2012, is expected to be a key driver of growth. To illustrate this point, the online market in China alone was at $6 billion in 2012. The opening of new retail stores in developing nations, including China, is another source of future growth. Nearly half of the luxury goods sold today is brought by consumers from emerging markets. But the biggest trend to look forward is the 'luxury experience. It is not just about a luxury item anymore, but the entire experience is what makes the difference. The total market for luxury, including 'experiences' is expected to touch $1.3 trillion in 2015. One such example is the fact that 40% of luxury goods are bought by tourists. 'Luxury tourism' through different experiences, including fine wining, dining and shopping could be one way ahead.
Considering the important role that E-commerce and emerging markets are going to play in the future, an MBA in Luxury Management would position applicants effectively in this lucrative Business. As Europe is the epicenter of the luxury goods industry, most of the top programs are located there. The region offers experiential learning and industry contacts for fresh graduates.
Here are our top five picks for Luxury Management Program. For comprehensive information about Top MBA, Post-MBA Salary & trends, download F1GMAT's MBA research guide.
1) ESSEC MBA in International Luxury Brand Management
ESSEC's 11-month MBA program in International Luxury Brand Management is taught in English, with a class size of 45 students, 90% of whom are international. The school is located in Cergy-Pontoise, just 35 minutes from central Paris, the heart of the fashion industry. The program was created in 1995 and maintains a strong Global focus. Some of Essec MBA’s partners and current contributors include Bacardi, Baccarat, Calvin Klein, Chanel, Estée Lauder, Gucci , L’Oréal , LVMH , Christian Dior, Dom Pérignon and Swarovski. The program offers specializations in fashion & accessories, watches & jewelry, fragrances & cosmetics, wine & spirits, hotels & real estate and cars & technology.
Students learn to tackle issues from global perspectives while weighing situations from business, financial as well as cultural paradigm. The program is divided into 5 parts - Introduction to Luxury & core MBA studies, Business Knowledge & Market trends, Luxury Brand Management & Semiotics, Luxury Sector Management and a two-month project. ESSEC's faculty is supported by visiting specialists as well as professionals.
Experiential learning is an important aspect of the learning process. Every February, a 12-day field trip is held that helps students learn from leading experts and executives, and offers a better understanding of the local markets. Recent trips include travel to Hong Kong and Dubai. A trip to Italy takes place in April, and students visit jewelry and fashion houses like Gucci, Bulgari, Fendi and Ferragamo.
Student teams complete a 2-month consulting project at a top luxury company with the Luxury Global Field Project, supported by a faculty member and a company manager. Past projects were completed in L’Oreal Luxe, PPR Luxury, American Express, Louis Vuitton, Chanel and Cartier. CEO seminars are usually held on Wednesdays, with speakers like Serge Brunschwig - COO of Christian Dior Couture, Daniela Ott - COO of PPR Luxury and Bruno Pavlovski - CEO of Chanel.
2) SDA Bocconi MBA - Luxury Business Management Track
SDA Bocconi's Full-Time MBA offers a highly evolved Track in Luxury Business Management (LBM). The program is conducted in Milan, a global fashion & design hub, with the world's highest concentration of fashion houses, showrooms, ...