Luxury no longer immune to macroeconomic pressures
The luxury sector has largely been a beacon of stability as the rest of the clothing sector struggled. But while luxury firms like Burberry have long pinned their growth hopes on China, even here all is not as well as it seems.
The luxury sector has largely been a beacon of stability as the rest of the clothing sector has struggled with the shocks provided by the uncertain macroeconomic environment over the past few years.
UK luxury brand Burberry's share price has dropped this morning after it warned that its full-year profits will be at the "lower end of market expectations" following a slowdown in sales growth.
Chinese consumers now account for around 25% of the world's luxury apparel and goods sales - but their increasing sophistication and propensity for overseas shopping could lead megabrands like Louis Vuitton to lose market share, a new report warns.
The Chinese government has scaled down the country's consumer goods growth target for the next five years as part of its latest development plan for domestic trade.
China's reputation as one of the most attractive emerging consumer markets has come under pressure in recent months, with jitters around its slowing retail growth combined with a series of profit warnings from local brands. However, reports that China is loosing its lustre may be premature, as Petah Marian reports.
It's no secret that China continues to steal the bulk of the world's luxury apparel and goods sales, accounting for some 50% of the total. But with China's growth rate forecast to slow in 2016, luxury houses could be forced to expand in other markets - with Latin America topping that list.
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