Luxury conglomerate LVMH Möet Hennessy Louis Vuitton reported a 17-percent spike in first-quarter sales, year over year, as well-heeled Chinese shoppers returned to its stores and consumers in Europe and Japan stocked up on the company’s clothing, handbags, and jewelry.
Sales soared 34 percent in Japan, 24 percent in Europe, and 14 percent in Asia, including China. U.S. sales rose 8 percent during the period.
The figures indicate that China’s well-off consumers are regaining confidence in their economic future and are ready to spend to pamper themselves after the country’s three-year anti-COVID campaign.
China made up a third of the world’s market in luxury goods in 2018, but sales there tanked under the country’s stringent anti-COVID lockdowns.
However, Chinese consumers kept their taste for high-end goods, accounting for around 18 percent of the market last year, according to Bain & Co.
LVMH booked “some pretty nice pickup in China, which bodes well for the rest of the year,” CFO Jean-Jacques Guiony said in a 12 April analysts’ call.
While China might remain an anchor for luxury retailers, analysts have wondered if the U.S. and Europe will sustain current sales levels as interest rates continue to rise, inflation persists, and the economic outlook remains cloudy.
TREND FORECAST: We note this article to also illustrate why French President Emmanuel Macron went to China to establish his China First policy… it has little to do with geopolitics, it has all to do with economics: See “THE BOTTOM LINE: FRANCE’S MACRON’S PUSHING CLOSER TO CHINA AND AWAY FROM U.S.” in this issue.