The Sales figures from the major European luxury brands did not confirm the recovery of Chinese demand high-end fashion. Which darkens the prospects of the sector.
Kering warned on Tuesday that its first-half profit would fall sharply, alluding to the low demand in Asia, and in China in particular, in addition to his difficulties in turning around the star brand Gucci. On Wednesday, its shares hit six-year lows.
The fall in income of luxury brands
He Italian luxury group Ermenegildo Zegna also saw its revenue fall in the first quarter, dragged down by the decline in sales of its Thom Browne brand in the Greater China region.
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Impact. Big luxury brands show the demand for their brand.
The The exception was the Italian family company Pradawhich saw demand boom for its Miu Miu fashion brand and continued growth in Asia. Moncler will present its results on Wednesday and Hermes on Thursday.
The brands that did show good results in the sector
The solid results presented last week by LVMH and beauty giant L’OreaThey had helped bolster confidence, but did not allay concerns about Chinese appetite for their luxury products and the sector in general. The luxury industry had predicted a difficult first quarter compared to the same period last year, when business soared after China lifted strict restrictions imposed to curb the spread of COVID.
However, A “series of adverse factors” are slowing the growth of the Chinese economy, said Ira Kalish, Global Chief Economist at Deloitte, in the World Retail Congress held in Paris last week, citing the real estate crisis, stagnant private sector investment and trade disputes.
LVMH, which sells fashion and accessories from Louis Vuitton and Dior and jewelry from Tiffany & Cosaid first quarter sales in Asiaexcluding Japan, they fell 6%. But he stated that Chinese buyers had purchased an increasing proportion of its products outside the region, traveling to Japan and Europe, a view echoed by Prada on Thursday.
Fashion brands in China
Analysts consider that fashion brands such as Chanel, Hermes and Louis Vuitton (LVMH) are in a position to strengthen their presence in China during a period of slow growth, as its older and wealthier customer base is less vulnerable to economic hardship.
“China will be able to reactivate its economy”Bernard Arnault, CEO of LVMH, told reporters last week.
