Luxury market faces Chinese slump
Investors anticipate a sharp downturn in luxury sales for the first quarter due to weak Chinese demand and challenging comparisons with last year’s pandemic-driven surge, according to a report from Reuters.
LVMH leads the reporting on April 16, with Kering, Prada, and Hermes following suit. Kering’s recent warning of a 10% sales drop, attributed to sluggish Gucci sales in Asia, has already dampened expectations. Concerns linger over the broader luxury market's recovery, with Chinese spending habits remaining subdued.
Kering’s stock has tumbled 15%, while LVMH and Hermes have also seen declines, albeit less severe. Analysts project a slowdown in luxury sales growth globally, with selective brands like Louis Vuitton and Chanel outperforming others like Burberry. Despite some optimism for Prada’s Miu Miu line, overall growth is expected to decelerate.
Forecasts suggest flat sales for LVMH, modest growth for Richemont, a significant decline for Burberry, and robust growth for Hermès.
Image: Hermès store in Wuxi, China.
