Oct 16, 2014
Hong Kong protests impacting LVMH sales
Oct 16, 2014
The protests in Hong Kong "are going to have an impact" on LVMH sales, the global leader in luxury warned on Wednesday, with Hong Kong being one of the major luxury hubs in the world.
"What is currently happening in Hong Kong is going to have an impact," stated LVMH Financial Director, Jean-Jacques Guiony, during a telephone conference after the posting of its third quarter sales.
"We have already noticed a certain negative impact on the DFS (Duty Free Shops) activity in the third quarter," due to the protests but also due to the "anti-China sentiment that has formed and which is affecting business," pointed out Guiony.
It is too early to measure the consequences of the discords which have been culminating since the end of September and which mostly concern the activity in the 4th quarter, explained the Financial Director of LVMH, which owns some sixty luxury brands, including Louis Vuitton and prestigious brands of champagne and cognac.
"Our (selective distribution) numbers are down by 5 to 6% for the first two weeks of October, which isn't too bad," stated Mr. Guiony.
"But they will continue" to drop since the Chinese authorities are now limiting tourist visas and "we are no longer seeing a lot of people" in the stores, conceded Mr. Guiony.
The luxury industry makes around 10% of its sales in Hong Kong. But the former British colony is experiencing an unprecedented crisis regarding the 2017 elections, which has been culminating for three weeks with confrontations.
These last few weeks, Chinese tourists are more and more rare in Hong Kong.
"In the watch and jewellery sectors, we have data showing a current decline of up to 50% in retail sales," revealed a Parisian analyst.
Most of the luxury groups are feeling an impact.
Starting with those specialised in watches and jewellery, such as the sector's number two player, Swiss company Richemont, owner of Cartier and Van Cleef & Arpels.
Because "Hong Kong is the main platform in the world for watchmakers," stated the analyst questioned by the AFP.
"Hong Kong normally represents nearly 20% of the Richemont and Swatch Group revenues," he emphasised.
Copyright © 2022 AFP. All rights reserved. All information displayed in this section (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the contents of this section without the prior written consent of Agence France-Presses.