Louis Vuitton sales in Europe have been hit by a drop in demand, particularly from Asian tourists, while China has been sluggish with no sign of improvement, Chief Financial Officer Jean-Jacques Guiony of LVMH (Vuitton parent company) told analysts and investors in a conference call today.
LVMH said demand in China in the past 9-10 months had been “flattish,” due to a weakening in economic growth and a government crackdown on gifts for favours. Price increases in Europe made shopping in Paris and Milan less attractive for tourists from Asia. If, on average, Louis Vuitton prices were about 45 percent higher in Beijing than in Paris, with recent price increases in Europe, the difference was now about 30 percent, Guiony said.
“It is less interesting to go outside China than it used to be,” he said of Chinese tourists shopping in Europe. Also, China’s economic growth is not what is used to be … And the change in leadership has had some consequences in terms of gifting,” Guiony said, adding that traffic was down in most shopping malls in China.
adapted from Reuters
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