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All News » Louis Vuitton are Thriving Despite China’s Volatile Stock Market

Louis Vuitton are Thriving Despite China’s Volatile Stock Market

Finance and Banking

China has long been one of the biggest markets for luxury goods such as designer handbags, high-end fashion and perfume. Destinations such as Hong Kong and Macau have become associated with the luxury goods market as the region’s premier shopping destinations, but these have experienced a dip in spending over the last few months. Economic growth appears to have slowed recently, with this being one of the sectors most affected, and many big name brands are showing signs of struggle. However, contrary to expectations, leading design house Louis Vuitton has reported thriving sales.

An Unstable Market

The Chinese stock market has undoubtedly been experiencing a period of volatility of late. The economy had been boosted by governmental measures put in place to stimulate and support the market which have initially led to a strong performance. However, it appears that concerns the government may withdraw this support have spooked investors, who fear the market cannot support itself without them, and led to a dip in stability.

Success for Some Brands

Top name fashion house Louis Vuitton appears to have bucked the current trend, claiming growth of almost 20% on last year’s figures. The LVMH group, of which Louis Vuitton is the leading label, reported revenues of 16.7 billion euros for the first half of the year. This is driven in part by US and European markets responding well to creative director Nicolas Ghesquiere’s innovative designs, but also by an increase in sales of around 10% to Chinese customers. The brand’s iconic monogrammed items have found new favour with Chinese customers, boosting sales considerably. This success also seems to have spread to LVMH’s other labels. Fendi is renowned for high-end handbags, sunglasses, timepieces and a range of ready-to-wear clothing. French fashion house Givenchy specialises in fragrance, haute couture and accessories. Both of these brands also seem to be benefiting from the strong performance of the LVMH group.

Global Sales High

The reported success of brands such as Louis Vuitton in China even during these difficult economic times may not be entirely due to sales made there. The weak performance of the euro over the last year has given the yuan additional buying power. It is likely that the real reason behind Louis Vuitton’s success is in fact a boost from purchases made in Europe by Chinese customers rather than strong sales in China itself.

The Louis Vuitton label has reported substantial growth in its fashion and leather goods divisions, with high levels of sales in Europe, the United States and China. However, the impressive Chinese sales can be in fact attributed to Chinese customers buying luxury goods at competitive prices in Europe rather than an increase in purchases in China.

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