UPDATE 1-Tepid recovery in global luxury sales seen in 2010

* Global luxury goods market to shrink 8 pct this year -Bain

* Timid growth seen in 2010 - Bain

* Sales improvement seen in H2 2010 - Italy's Altagamma

(Adds Altagamma forecasts, quotes, Milan dateline; changes story slug from GLOBAL-RETAIL/LUXURY)

HONG KONG/MILAN, Oct 19 - The global market for luxury goods will fall this year and will see scant growth in 2010 as small recovery signals only start emerging in coming months, a report said on Monday.

U.S. consultancy Bain&Co expects global luxury sales to fall 8 percent this year -- or 11 percent at constant exchange rates -- to 153 billion euros ($228.6 billion) as the crisis saps demand for designer clothes, jewellery and watches.

Bain forecast an improving trend in the last quarter compared with the start of the year but sees the luxury goods market rising by only 1 percent next year to 155 billion euros.

"2010 will be a year of consolidation. We can start talking about recovery the following year, but you need to wait until 2012 to go back to pre-crisis levels," Bain&Co partner Claudia D'Arpizio told the Altagamma luxury goods conference in Milan.

British luxury fashion house Burberry Group Plc announced better-than-expected second-quarter revenue last week, indicating consumer confidence may be improving. Rising Asia-Pacific sales would be offset this year by an expected 16 percent drop in sales in the Americas, which accounted for nearly a third of the world market, Bain said.

China remains the fastest-growing major market for luxury brands. However, projected sales growth this year of 12 percent will be less than half last year's 30 percent increase.

Sales in Europe -- 38 percent of global sales -- are seen down 8 percent, while in Japan, which accounts for 12 percent of the world market, Bain sees luxury sales dropping 10 percent this year partly due to a generational shift as younger Japanese prefer mixing luxury goods with niche local brands.

Looking to 2010, Italian luxury goods association Altagamma said it saw sales improving in the second half of the year. It forecast turnover for clothes, jewellery, leather goods, perfumes and cosmetics rising in the low-single digits next year. However, turnover for tablewear would still be down.

"We will probably see rising sales at Christmas this year and we expect a return to general positive signs in the second half of 2010," Altagamma Chairman Leonardo Ferragamo said.

Altagamma has said it expects a 21 percent drop in EBITDA for the sector in 2009. It sees it up 5 percent in 2010.

French luxury group Hermes International SCA said this month the industry was not out of the woods yet and any improvement in the next 15 months was unlikely. (Reporting by Susan Fenton in Hong Kong and Marie-Louise Gumuchian in Milan, Editing by Chris Lewis and David Holmes)