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Today’s retail environment is forcing luxury retailers to become more efficient and more competitive, with earnings growth expected to rise this year.
A new Moody's report shows global luxury retailers’ earning growth could advance from last year’s 4% to 7% by the close of 2017, Retail Dive reports. That is positive, though below the double-digit growth experienced from 2010 to 2013. Many luxury retailers are pulling away from brick-and-mortar and closing stores, and the report said this strategy will free up cash and allow companies to improve their online offerings.
Not all luxury retailers are expected to succeed, and Moody’s said it expects Tiffany & Co. and Ralph Lauren to have stagnant growth over the next 18 months as the strong dollar and other near-term pressures take their toll. Moody’s said it will be difficult for luxury retailers to raise prices to past levels because consumers can easily compare prices online, and said companies will need to shift prices globally to reduce geographical differences.
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