Luxury shoppers in China are still buying bags, but not BMWs

SYDNEY: China’s luxury shoppers may be shunning pricey autos, but they’re still finding an appetite for handbags and champagne as the trade war plays out unevenly across the country’s high-end retailing landscape.

Report cards from LVMH, home of Louis Vuitton leather goods and Dom Perignon champagne, as well as casino operators in Macau offer signs that the trade fight with the US and the accompanying economic slowdown aren’t entirely derailing the China-led boom in top-end retail.

That’s helping to offset gloomier scenarios in BMW and Mercedes showrooms and luxury real-estate offices.

French giant LVMH said pn Tuesday its luxury retailer DFS performed especially well at the key Chinese tourist destinations of Hong Kong and the gambling enclave of Macau, while the company’s wines and spirits business “grew rapidly” in China, too.

Across the world, “all geographical areas progressed well,” LVMH said, as it reported a 10% jump in third-quarter sales.

Chinese consumers make up the lion’s share of growth for the luxury business as an increasing number of families cross the income threshold to become affluent.

Relief also showed up in Macau during the Golden Week holiday, which is often seen as a thermometer for China’s economy. Chinese tourist arrivals in the world’s largest gaming centre for the period that ended Sunday jumped 14% from a year earlier. High rollers bet 10% more in the first six days of October than in the same period last year, according to Morgan Stanley.

Chinese households are also balking at committing to other big-ticket items. Jaguar Land Rover, the British marquee brand owned by Tata Motors Ltd, reported sales in China slumped 46% last month, amid uncertainty over import duty changes and trade tensions.

Fashion is holding up better. Chow Tai Fook Jewellery Group Ltd, the world’s biggest jewellery retailer by revenue, notched double-digit sales growth in mainland China and Hong Kong for the three months ended June.