The Luxury Bubble Is About To Burst, And The Rich In China Are Unable To Return To It.

"The luxury bubble is about to burst."

This is an outbreak since 2008.

Since then, prudent investors and analysts have often said something.

But facts always prove that they are wrong.

And this time, they may be right.

Retailers have not been affected by the worldwide recession in recent years. Luxury sales have been boosted by growth in emerging markets and European tourists.

Asia, especially China, has been the biggest engine of luxury growth as wealthy people buy luxury goods.

According to Hurun Report, Shanghai wealth Research Institute, it is in China.

Assets of over 6 million yuan (nearly 1 million US dollars) have 2 million 700 thousand high net worth individuals, and assets of more than RMB 100 million yuan have 63 thousand and 500 people.

But there is growing evidence that Asian engines driving the growth of luxury goods may start to be less powerful.

If we look at those data, especially those outside China, we will find that the sales growth of all kinds of luxury goods is slowing down, the growth rate has dropped significantly, the change track is worrying. Now the question is whether the situation will get worse. Last week, the British luxury goods giant Burberry PLC showed that it began to feel the signs of the global economic slowdown in SW Retail Advisors, Wade Rich.

According to the constant exchange rate, its overall sales growth in the first quarter dropped from 34% in the same period last year to 11%.

The worst is the Asia Pacific region.

These data led to the fact that Bo Boli shares fell more than 7%, leading to market concerns: whether the LVMH Moet Hennessy Louis Vuitton SA (LVMH) and the Italy fashion brand Prada (Prada SpA) and other luxury magnates will announce their quarterly results in the next few weeks.

Sharma Rahul Sharma, general manager of Neev Capital, a consultancy, said the overall situation in Asia is worrying.

He said boboley's earnings in the first quarter were lower than analysts' expectations.

Over the past 12 months, burberry's share price has fallen by nearly 22%.

LVMH shares fell 12%, while French luxury company Hermes International SCA's share price fell by nearly 7%.

In major Europe

Only Prada's share price increased slightly, up by 2% over the same period last year.

Although most analysts remain optimistic about the value of boboley and continue to buy a rating on their stock, many people have lowered their profit forecasts for fear that boboley's sales in China will decline.

Although many luxury goods companies have announced two digit growth in China, it is useless.

Boboli's first quarter figures show that its Asia Pacific business grew by 18%, down from 67% in the same period last year.

Catlett, chief financial officer of Stacey, said sales growth in China dropped from 30% to around 15% in.

Goldman Sachs has moved boboley's shares out of the "sure buy" list, and the list is dominated by a clear advantage.

Analysts at Bank of America Bank of America Merrill Lynch say that Bo Bailey is unlikely to achieve a 15% increase in earnings per share from 2012 to 2013.

Hocking (Bethany Hocking), an analyst at Investec Securities of the securities firm, admitted that Bob had a lot of advantage in China, including its wide distribution network, but she had cut the profit forecast of bobailey's 2013 and fiscal year 2014 by 2% and 3%, respectively.

China's gross domestic product (GDP) growth fell to 7.6% in the second quarter, down from 8.1% in the first quarter.

Wade Rich said that China's economic slowdown will permeate the balance sheets of the world's luxury brands.

She said that you have to put all parts of the puzzle together to say that the luxury sector is at a loss.

Wade Rich said the luxury industry can no longer rely on China to achieve strong growth.

She also said that high growth areas such as Brazil and India were not enough to make up for the demand gap left by China, the United States and Europe: "companies are beginning to ask: where should we seek growth? Who will save us now?" LVMH and fashion accessories brand Hermes will announce their performance reports in the next two weeks, and we will soon know whether Bob Lee's growth will cool.

The beginning of bad performance.