The market for luxury retail in Europe is to grow by nearly $60 billion (£37.2 billion) in the next five years despite competition from China, according to the latest analysis.
Retail research company Verdict estimates that by 2015 the market for upper-end products in European countries will be worth $175 billion.
Although many luxury retailers, such as Burberry, have been expanding their presence in emerging growth markets like China, devalued currencies combined with an increasing number of rich consumers should keep Europe ahead of other regions.
Ruta Perveneckaite, Retail Analyst at Verdict, said: “Although the market for luxury retail is mature in Europe, there are a great number of opportunities for growth.
“This will be helped by an increasing market for luxury as the number of wealthy individuals is set to rise - by as much as ten per cent in the UK alone and by seven per cent in France, Italy and Germany over the next four years.
“Added to this is tourism, as the decline of the euro has meant that it’s now cheaper to buy luxury items in Europe.”
A number of big international events over the next few years, including the 2012 Olympics in London, the 2014 Winter Olympics in Russia and the 2015 Expo in Milan, should keep affluent tourists coming to the continent.
Furthermore, some big international brands, including Chanel and Louis Vuitton have or are about to open new stores in London, showing that the market is bouncing back from the year-on-year decline of $17.7 billion experienced in 2009.
Although the luxury retail sector was slow to adopt the new medium, 2010 saw the launch of transactional websites from both Gucci and Ralph Lauren, and an expansion in this area is expected to be the other big trend in the coming years.
Perveneckaite continued: “Selling online also allows luxury retailers to reach the mass market.
“These consumers, who may feel intimidated by prestige stores or may struggle to get to these stores, can easily view products and this may encourage them to save up. Therefore increasing sales and opening up the market.”