Luxury sales in China fell sharply in July, with the 25 largest brands recording declines of more than 10%. Major names including Louis Vuitton, Dior, Gucci, Bottega Veneta, Balenciaga and Hermès were affected. The slowdown is being driven by weaker consumer confidence, falling stock markets, depressed property values and tighter government controls on offshore wealth and taxation. Wealthy Chinese consumers are becoming more cautious, reducing spending on luxury goods, travel and gambling.
The downturn adds pressure on global luxury groups such as LVMH and Kering, which depend heavily on the Chinese market. August will be an important test, with Chinese Valentine’s Day traditionally providing a strong boost to luxury spending.
