Sales of luxury items have recovered well in the UK following the recession and will continue to grow, according to new research published today.

Verdict Research says that the UK’s jewellery and watch market is the second largest in Europe and the global market for this sector is set to grow by 50 per cent in the next five years.

The last three years have been tough for the luxury items sector but this year is set to see growth, and in Europe sales of watches and jewellery should total $28 billion (£17.6 billion).

Ruta Perveneckaite, analyst at Verdict, said: “We expect to see a return to growth for the UK jewellery market this year with the luxury market stealing market share from the mass market.

“This reflects the global trend where during 2009 the luxury segment shrunk by minus nine per cent but this year it is set to show growth of more than eight per cent.

“In comparison the mass market grew by 2.5 per cent in 2009 and will only see a marginal improvement of 3.1 per cent this year.”

Branded own stores in the luxury market are expected to multiply over the next few year as luxury brands have found that own stores sales have held up much better than department store sales in recent times.

Luxury goods brand Richemont reported a 32 per cent increase in sales in its first half results last week, with own stores sales up 24 per cent and now representing 47 per cent of the group’s trade.

Another growth area for the sector is online trade, and Verdict argues that luxury goods retailers need to expand in this channel.

Perveneckaite continued: “So far many brands are missing an opportunity by not launching into the online space. Consumers are now increasingly willing to buy big ticket items online so brands should change their approach to capitalise on this.

“For example the US online diamond specialist Blue Nile maintained sales throughout the recession and now operates in 24 currencies.”