LVMH, world No. 1 in the sector and owner of brands like Louis Vuitton, Givenchy and Dior, saw its sales drop by 3 per cent in Asia, excluding Japan, in the third-quarter of this year, a far cry from the halcyon days of 2010-2012.
Arnaud Cadart, an analyst at CM-CIC securities, said there was a “rare coming-together of economic, monetary and geopolitical factors that have had a negative impact on the Asian market”.
Slowing economic growth in China, along with a clampdown on lavish spending by government officials, is crippling luxury goods firms that are used to viewing the growing pool of wealthy and brand-conscious consumers in the world’s No. 2 economy as a cash cow.
Luxury goods firms have also complained that a drive to stamp out lavish and ostentatious spending has dried up sales of cognac and expensive wines as well as items such as watches, traditionally given as presents.
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