Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Global luxury sector to get a boost on China’s reopening

Global luxury sector to get a boost on China’s reopening

After a year of record sales and profits despite slowing global growth the luxury sector is looking to the reopening of China to deliver further expansion in 2023.
The world’s largest luxury group LVMH posted a 23-percent jump in sales to a record of €79 billion ($86 billion) in 2022 and saw profits climb 17 percent to €14 billion.

The company’s chief executive, Bernard Arnault, wants to continue along that path in 2023, “at the risk of becoming boring.”

LVMH’s rivals also managed blistering growth in sales and profits last year.

Sales at Hermes jumped 29 percent to €11.6 billion and profits soared 38 percent to a record €3.4 billion.

Kering, despite a tough time for its flagship brand Gucci, still managed a 15-percent increase in sales to €20 billion, while profits rose 14 percent to €3.6 billion.

Ferrari also saw sales race to a new record of €5 billion, delivering 13,221 vehicles last year.

The 2022 results were barely dented by the disruption in China linked to end of its coronavirus-related travel restrictions and their progressive lifting at the end of the year, with LVMH calling the month of December an “air pocket.”

Only Hermes escaped unscathed.

“There was no drop in traffic in our stores,” said Hermes chief executive Axel Dumas.

The company’s sales rose 30.7 percent in its Asia-Pacific region excluding Japan.

The gradual reopening of China — which abandoned the last of the draconian travel restrictions of its zero-COVID policy on Jan. 8 — should help its economy expand by 5.2 percent in 2023, according to the International Monetary Fund’s latest forecast.

With the restrictions having restrained consumption, the reopening of the Chinese economy is being looked at as a growth opportunity for 2023.

Analysts at UBS say 2023 will be the “year of the Chinese consumer,” noting that the pandemic restrictions pushed down the share of Chinese consumers in global luxury spending to 17 percent last year, compared with 33 percent before the pandemic.

“The Chinese clientele is much more important than it was in 2019,” LVMH’s Financial Director Jean-Jacques Guiony told journalists.

Guiony does not expect Chinese tourists to return to Europe, where they traditionally spent heavily on luxury goods, before next year.

Instead, luxury groups are focusing on Chinese consumers at home.

LVMH’s Arnault said it was no secret that China needs growth and that the government would likely take steps to facilitate economic expansion as the country reopens.

“If that is indeed the case — and it began in the month of January — we have every reason to be confident, even optimistic about the Chinese market,” he said at the presentation of LVMH’s 2022 results.

China is a “volcano ready to explode,” said Arnaud Cadart at asset manager Flornoy Ferri.

“There is an incredible amount of savings that has been built up, an incredible reserve in the hands of the well-off class which wants to purchase luxury goods,” he added.

Cadart estimated the luxury market in China could jump by 30 percent this year.

Kering’s chief executive Francois-Henri Pinault visited China at the end of January and said he was amazed by the people thronging stores “like the virus had never been in China.”

“This is a good sign,” said Pinault, who also welcomed moves by Chinese authorities to boost domestic consumption.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
×