Bling Loses its Sparkle
In 2012, China spent its way past the USA to become the biggest luxury goods market in the world, according to the Business of Fashion website. However, the same article notes that the growth of China’s luxury market dropped to seven percent in 2012, down from more than thirty in previous years.
LVMH, a French luxury goods conglomerate that owns Möet & Chandon and Louis Vuitton, reported that sales growth in China has dropped from ten to twenty percent to just five percent in 2013. In the same period, Salvatore Ferragamo’s revenue growth in Asia halved to ten percent. When the price of shoemaker Tod’s shares fell seven percent, the company blamed declining demand in Asia.
While industry says the anti-corruption campaign is responsible for declining sales, changing tastes are also partly responsible: the ostentatious embrace of luxury brands by déclassé nouveau riche has also taken some shine off the bling for the truly well-heeled.