It isn’t only consumer product goods companies targeted at the middle class that fared poorly in 2014. Regardless of what the confidence readings or the employment indicators say, shoppers around the world have exercised restraint for a number of years and have not returned to their free-spending ways of the late 90s and early 2000s.
Blame it on exogenous factors ranging from the Crimean crisis and the sanctions imposed on wealthy Russians; the tightening of anticorruption measures in China, creating a reluctance among the Chinese to be seen as ostentatious spenders; or the street demonstrations in Hong Kong. There are also real macro financial factors as well, including Japan entering a recession in Q4 2014; weakening trends in Europe as the year progressed; and the continued consumer malaise in the US. When the numbers are finally tallied, 2014 will have been a year of very modest (if any) growth in the global personal luxury goods sector. [Read more…]