China's economic slowdown and a crackdown by Beijing on displays of wealth are taking a toll on some of the world's top luxury brands. LVMH says its sales in Asia, which include China but not Japan, fell by 14% in the three months to the end of June, worsening from a 6% decline in the first quarter. The Paris-based firm is not alone, as many of its competitors are also seeing sales slow in the world's second largest economy.
It comes as Chinese shoppers cut back on expensive purchases and government censors shut down social media accounts of influencers who have shown off their luxury goods online. LVMH, which is the world's largest luxury group, also said its overall revenue growth had slowed to 1% for the period. Still, the group's chairman and chief executive Bernard Arnault remained cautiously optimistic.
“The results for the first half of the year reflect LVMH’s remarkable resilience...
in a climate of economic and geopolitical uncertainty." "While remaining vigilant in the current context, the Group approaches the second half of the year with confidence," he told investors. Shares in the the company - home to 75 high-end brands including Louis Vuitton, Dior and Tiffany & Co - have fallen by almost 20% over the last year.
LVMH is not the only big name feeling a slowdown of luxury goods sales in China. In its latest financial figures, upmarket British fashion label Burberry said its sales in mainland China had fallen by more than 20%, compared to a year earlier. Swatc.