The global luxury goods industry, which includes drinks, fashion, cosmetics, fragrances, watches, jewelry, luggage and handbags, has been on an upward climb for many years. Although the technical term 'luxury good' is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Luxury goods manufacturers meet consumer demand by focusing on brand, aesthetics, quality materials, superior craftsmanship and pricing to transform everyday objects into status symbols. The industry rises and falls with the gross domestic product (GDP), seeing demand climb in times of economic stability and plummeting in unfavorable economic climates. The United States has long been the largest regional market for luxury goods and is estimated to continue to be the leading personal luxury goods market in 2015, with a value of 78.6 billion euros.
LVMH (Louis Vuitton Moet Hennessy) was the most valuable luxury brand in the world, with a brand value of about 41.14 billion U.S. dollars as of 2018. The LVMH Group's total revenue for the 2016 fiscal year was about 37.6 billion euros. Moët Hennessy Louis Vuitton, more commonly referred to as LVMH Group, is a French luxury goods conglomerate. The company is primarily known for its fashion house, known as simply Louis Vuitton, named for its founder. The conglomerate operates globally, selling luxury leather goods, handbags, ready-to-wear fashion, and other fashion accessories. Since 1989 the company has been run by Frenchman Bernard Arnault, following the merger of the luxury goods producer with champagne producer Moët & Chandon and cognac manufacturer Hennessy.
New markets and segments are giving the industry growth points. One challenge for luxury companies is to maintain brand equity and cultivate their customer relationships. As luxury expands into more industries, expect a more mature segmented market. As a result, consumers should also become more rational.