Luxury sales in China to drop, first such decline since 2004
Luxury sales growth in China’s have been slowing after a 20 percent jump in 2012. Sales are expected to drop by 2 percent for mainland China, which would be the first luxury sales decline in over a decade. The decline is largely attributed to the Chinese government’s austerity measures that have now expanded beyond public officials to businesses. This has led to lower sales in several luxury categories such as watches and men’s clothing. (WSJ)
Chinese travelers have been supporting European luxury sales. Sales to tourists were either flat or down in several European countries such as the United Kingdom and Germany, but Italy and France fare much better due to a boost in spending by Chinese shoppers, according to Global Blue, a firm that tracks foreign tourists’ purchases. Global Blue projects Chinese spending to rise by 10 percent next year. Global Blue noted that Italy, France, Germany and the U.K. account for over 70 percent of foreign spenders.
The luxury goods sector is expected to grow by 2 percent to 223 billion euros, and 5 percent to $283.2 billion at current exchange, in 2014 compared to a year ago, according to research by Bain & Co. and Fondazione Altagamma, the Italian luxury goods association. In 2013, sales grew by 3 percent and 7 percent at constant exchange compared to the previous year. Geopolitical uncertainties and declining consumer confidence in Europe contributed to the overall weakness.