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Luxury Brands Optimistic About US Spending

Luxury industry insiders are optimistic about 2015, a new report from Wealth-X reveals. Despite sharply lower oil prices, a cooling economy in China and less upper-income spending in Europe, the market intelligence firm’s quarterly survey says 92 percent of senior-level executives are expecting to see growth in total revenue this year, a large majority of which will likely come from the United States.

Buoyed by market gains and a recovering economy, the number of millionaires in the U.S. has grown by 1.6 million since mid-2013, Credit Suisse estimates. Underscoring this, a recent report by LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury goods group, revealed that annual revenue in the U.S. jumped 8 percent last year.

“There’s a backdrop of optimism from a macro perspective,” Wealth-X president David Friedman told Luxury Daily. “That kind of wealth effect becomes self-fulfilling, making people feel greater optimism, and when they do that, it’s the spirit that drives more luxury spending, which then creates better financial results for luxury.”

In addition, Wealth-X reports that 90 percent of respondents have plans to expand throughout the year, with 16 percent expecting to open new stores. Stateside, Hermès, Salvatore Ferragamo and Paul Smith are set to open locations at a $300 million luxurious redevelopment of the World Financial Center in downtown New York City.

Not everyone is so optimistic, however. Morgan Stanley economists recently cautioned that rapid year-over-year growth in luxury spending might be unsustainable.