Luxury lags in Far East as shoppers go West
SELLING expensive wares – from watches to cognac and handbags to silk scarves – is getting tougher in Hong Kong and Macau but the latest data reveals Asian tourists are still flooding Europe and the UK to shop.
Analysts at Barclays yesterday highlighted data from tax return specialist Global Blue which recorded a 42pc jump in tourism to Europe in June, with Chinese tourist numbers up by nearly 88pc year-on-year. Global Blue estimates the overall travel retail market is worth more than £33.5bn and accounts for 60pc of the European luxury market.
The market is also awaiting evidence of the impact of China’s recent stock market crash.
HSBC’s luxury expert Erwan Rambourg said: ‘If there is a negative psychological impact, it may affect more of the high end brands.’
The data comes as French luxury brand Hermès reported a 9.7pc rise in second quarter sales to £820m – beating City expectations.
It did, however, warn that its operating margin could be affected in the full year as the euro remained weak but it retained its medium-term sales growth target.
The silk scarf and exotic skin handbag maker said demand from Japan – up 20pc – drove its growth in the first half, and Asia excluding Japan rose 7pc.
Hermès has been largely insulated from the problems in China and Hong Kong due to the way it sells its most desirable handbags.
The group asks customers to put their name on a waiting list for its most expensive handbags, some which cost more than £5000. The bags include the Birkin, named after Jane Birkin, and the Kelly named after Grace Kelly.
Sales of cognac – a once popular tipple in China – have fared worse than handbags. Expensive cognac and whisky were among the drinks used to celebrate business deals or as gifts to officials but anti-bribery controls and the crackdown on ostentatious spending are still causing a hangover.
French spirits group Remy Cointreau posted weaker-thanexpected first-quarter sales yesterday, which it blamed on continued sluggish demand for premium cognac in China after the anti-bribery measures.
Group sales reached £156.8m and like-for-like sales slipped 9pc in the quarter to the end of June.