A panel of leading luxury retailers speaking at the World retail Congress has warned that the luxury market is not immune from the global credit crunch. Emerging markets and online will be the real earnings drivers in future.

Remarking on the theme of the panel “Remaining Aspirational in a Boom Market”, Esteé Lauder group president Patrick Bousquet-Chavanne questioned whether the term “boom” still applies in today’s economic climate. He warned that trend of aspirational shoppers “trading up” seen between 2002 and 2007 could be coming to an end. He said: “Nobody has a crystal ball, but we have seen a softening of demand across the retail market in the US.”

Galleries Lafayette chief executive Paul Delaoutre said he was reacting to the economic climate by moving into new and more profitable categories. “We are giving more and more space to new categories,” he said. However, Bousquet-Chavanne said: “It is still quite an exciting time to be in the luxury market.”

He said the only places in world experiencing a “boom” were the emerging markets of India, China and Russia. “I believe that it is very likely that for all of us in the branding world it will be a big share of earnings in the coming years.”

He added that the growing middle classes in these countries presented a great opportunity for luxury retailers. The emergence of retail infrastructures is allowing luxury retailers to enter the market. And consumers are becoming much more brand aware, particularly younger generations.

Lane Crawford group president Bonnie Brooks added: “It’s quite a good place to be if you have patience.”

Valentino president of sales, marketing and retail worldwide Graziano de Boni said: “The globalization of Russia has given us great results and Asia represents a tremendous opportunity for growth.”

However, Bousquet-Chavanne warned that they would need to invest heavily in the setting up in these markets and would not achieved the margins they do elsewhere straight away. “It’s going to take time to build brands,” he said.

The panel all agreed that the internet is another big growth opportunity for the luxury sector. On the whole, luxury retailers have been slower than others to set up transactional web sites, but they are now starting to move into this territory. There was also consent that developing a luxury experience online presents a real challenge.

De Boni said: “The emotional aspect is the most critical one to address.”

Making sure the site features added value is key. Bousquet-Chavanne said: The dwell time on our website increases as we add content. You have to contribute to what he/she cares about.”