Louis Weedon Sales Growth Fell By 75%

For a long time, China has been seen as the main engine of growth in the luxury goods industry, making up for the depressed demand in Europe and Japan. In particular, Japan started to increase consumption tax by 3 percentage points in April 1st this year, and consumers' desire for luxury goods has been seriously affected.

But this Friday, the LVMH group's earnings report set such a market judgement that China's demand situation is no longer going back to its previous prosperity. The global luxury industry has entered a long-term mild growth.

On Friday, the weathervane of luxury industry LVMH (MOET & CHANDON Hennessy Louis Vuitton group) announced its two quarter earnings. The group's two quarter sales recorded a real growth of 1.3%, from 6 billion 719 million euros a year earlier to 6 billion 803 million euros, with an organic growth rate of 3%, down from 6% in the first quarter. The operating profit margin in the first half of the year has shrunk from 19.8% in the same period last year to 18%. Net profit is 1 billion 509 million euros.

Among them, flagship luxury brand Louis Vuitton (Louis Weedon) belongs to the fashion leather department sales rose 2.7% to 2 billion 391 million euros, the growth rate compared with the 10.7% in the first quarter decreased by 75%.

　　 LVMH Shares also plunged 7.2% in intraday trading on Friday, the biggest one-day drop since 2009. It was also dragged down by the owners of Cartier, the Swiss Richemont group and the owner of Gucci, the French Kering group. The share price of the two companies fell by 3% and 3.7% respectively on Friday.

Bank analyst, Paris, France Luca Solca The interview said that although Louis Vuitton (Louis Weedon) vigorously innovates products, consumers, especially Chinese consumers, still can not fully accept its transformation.

　　 financial crisis After that, the sales growth rate of the luxury goods industry has rebounded between 2010 and 2012, and this growth trend has slowed down again in the past two years. An important reason is China's attack on corruption and extravagance and waste.

Affected by this, LVMH group's wine and spirits sector sales fell by 7%, continuing operating profit shrank by 14.5% to 461 million euros. The day of the wine brand in China has been very difficult since last year. Before that, the sales volume of Remy Cointreau (Remy Martin's clique group) fell by 30% and 32% respectively in the 3 and 4 quarters of last year.

LVMH group's earnings report failed to meet market expectations in the first half of 2014. The company said that the number of tourists shopping in Hongkong decreased, especially the number of tourists from mainland China.

Hongkong, once a British colony, usually has more than 10% of the global sales revenue of many leading brands in the luxury goods industry, which is 16% in the Richemont group and 12% in the Swiss watch giant Swatch's sales. The three markets in Hongkong, Macao and Mainland China account for more than 1/3 of the new global sales revenue of most of the top luxury brands.