After Cartier’s recent announcement of an imminent departure, Ralph Lauren’s temporary closure and similar news on Emporio Armani, Salvatore Ferragamo, Escada, Calvin Klein and Yves Saint Laurent, luxury giant Louis Vuitton is the latest luxury brand to exit Argentina, according to Financial Times.
A clampdown on imports has been making doing business increasingly challenging, the luxury retail sector being among the most affected. A slew of foreign exchange controls have made things hard for shoppers, the latest being an unwritten limit on dollar purchases for Argentines heading overseas, according to opposition business paper El Cronista Comercial. And Argentina’s rampant inflation has made the country expensive for foreign visitors.
Since its 2001 default on nearly US$ 100bn of debt has all but cut the country off from international credit, Argentina has been applying a policy of “vivir con lo nuestro” or “live on what we have”. Though it has restructured more than 90 per cent of that debt and has repaid other obligations its dubious inflation statistics and unpredictable policymaking have increasingly forced it to make a virtue out of such an approach.
Which must explain the reaction of Enrique Meyer, tourism minister, to the exodus of foreign luxury brands. Nothing to worry about here, he reckons. No, what matters is the march of Argentine brands abroad, he says, such as clothes makers Cardon and Pampero, ice-cream brand Freddo, and El Noble, maker of the much-loved and Cardon’s pasties – which has even opened in China.
Louis Vuitton is the only major international luxury brand which operates directly in Argentina, all other luxury brands being operated in franchising with local partner. Louis Vuitton’s only store in Argentina is in the capital of Buenos Aires on Avenida Alvear (inaugurated 2006).
adapted from the Financial Times
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