A surprising divergence is emerging in China’s luxury market: spending is continuing to fall, yet some Chinese luxury brands are growing at extraordinary rates. For European luxury groups such as Kering, Hermes and LVMH, which blamed soft China sales for disappointing results, this raises the possibility that even when the market recovers, their own sales may not. Kering’s stock slid more than 10 per cent on Friday as the Gucci owner said retail revenue in the Asia-Pacific region fell 8 per cent in the third quarter, year on year, highlighting China as a major headwind. LVMH’s sales in Asia, excluding Japan, fell 5 per cent excluding currency impacts. Even Hermès, whose exceptionally wealthy clientele is usually shielded from economic cycles, grew less than expected and said China was “very difficult.”
There is clearly a macroeconomic trend at work. Bain estimates
Source: Financial Times Companies · Summarized by HeadlinesBriefing