Economic chill dulls Chinese appetite for some luxury brands
Amid cooling economic growth in China, American and European luxury brands are facing a decrease in luxury spending abroad by Chinese big spenders, who are also shifting to buying more at home where many major brands have opened their stores
THE DESIGNER boutiques of Manhattan and Paris are feeling the chill of a Chinese economic slowdown that has hammered automakers and other industries.
That is jolting brands such as Louis Vuitton and Burberry that increasingly rely on Chinese customers who spend $90 billion a year on jewelry, clothes and other high-end goods. The industry already is facing pressure to keep up as China’s big spenders, mainstays for American and European retailers, shift to buying more at the spreading networks of luxury outlets in their own country.
Last week, Tiffany & Co. showed how much well-heeled Chinese tourists matter to retailers abroad. Shares in the jeweler known for $5,000 watches and $400 silver baby spoons fell 12 percent after its CEO said they were spending less.
In Hong Kong, the top shopping destination for mainland travelers, only a dozen visitors were in Tiffany’s flagship store one afternoon last week. Many looked without buying.
“The name brand goods are too pricey,” said Zhou Jiqing, from the neighboring mainland city of Shenzhen. “I’m waiting for the Christmas sale.”
Forecasters including Euromonitor International and Bain & Co. say Chinese customers will be the luxury industry’s main growth engine over the next decade. But this year, shoppers are skittish amid cooling economic growth, trade tension