Global Luxury Brands Rising

The LVMH announced a record revenue and profit figure in 2016 because of strong sales in the US and Europe and rising demand in Asia.

Richemont, Burberry and Ferragamo Salvatore also reported improvements in the Asian trading environment.

The second largest in the world

Provider Kai Yun group also welcomed the good news.

The fourth quarter 2016 earnings report released last weekend showed its fastest growth since 2012, at 10.4%, far exceeding analysts' expectations of 7%.

Among them,

Revenue increased by 21%, double the analyst's expectations.

Yves Saint Laurent has achieved more than 20% growth over the past sixth years.

The sluggish Chinese market has also seen a revival in the global luxury market.

Thanks to the price adjustment in the Greater China region and the decrease in outbound travel of Chinese tourists, there are many luxuries.

The sales growth in mainland China has been good, and the watch industry has also rebounded rarely, and the export situation has picked up.

Global luxury brands rising

LVMH group's French luxury brand Christian Dior fashion department released the second quarter performance report in early February. As the LVMH group decided to adjust its brand financial year to keep up with its other brands, the 2016 fiscal year only includes two quarters from July to December, and the 2017 fiscal year starts again in January.

In the three months ended December 31st, the brand recorded an increase of 12% in organic income, up from 8% in the first quarter, which once again proved that the global luxury industry is gradually recovering.

According to the world clothing and shoe net, the Dior fashion department's second quarter sales increased from 490 million euros in the same period of 2015 to 541 million euros.

In fiscal year 2016, Dior sales increased by 9% to 1 billion 40 million euros compared with the previous year, operating profit rose 33% to 178 million euros, and the LVMH Group Chairman Bernard Arnault, the brand parent company, said the result was consistent with the group's previous expectations, reaffirming the leading position of Dior in the global luxury industry, but he was cautiously optimistic about the 2017 fiscal year.

According to the world clothing and shoe net, thanks to the strong growth of its brand Gucci, Kai Yun group's revenue increased by 11.3% to 3 billion 507 million euros in the three months to December 31, 2016 compared with the same period in 2015. The annual revenue in 2016 increased by 8.1% to 12 billion 385 million euros compared with the same period last year, the biggest increase since nearly 4 years.

Under the stimulation of the organic growth of the second half of the year, general operating profit rose 14.5% to 1 billion 886 million euros over the 2015 fiscal year, and net profit rose 16.9%, up 814 million euros, exceeding analysts' expectations.

Under the vigorous reform and innovation of creative director Alessandro Michele, Gucci continued to perform well in the fourth quarter ended December 31st, and sales revenue increased to 21.4% euros, to 1 billion 342 million euros, of which retail sales increased by 28%.

In the 2016 fiscal year, brand sales increased 12.7% to 4 billion 378 million euros compared with the same period last year, while retail revenue increased 14.8% compared with the same period last year, and online sales revenue rose 19%.

Among them, all categories of brands recorded strong growth, especially in handbags, footwear and clothing categories. All regions except Japan were above double-digit growth of 10%.

Gucci has enjoyed strong sales growth since March last year, growing at a rate of more than two times the average of the luxury goods market. Bain consulting expects that the growth of the luxury market last year is 2% to 3%.

Gucci's brand new image has been proven to be in line with the millennial aesthetic. According to the earlier data released by the brand, the turnover of new products in the post-80s generation increased by 50%.

Some analysts say that Gucci is no longer the handbag brand that only relies on the shield badge to play the world. Alessandro Michele adds interest to its products, especially its various animal designs that have attracted a large number of young consumers.

Yves Saint Laurent, another important brand in the luxury sector of Kai Yun group, has also risen against the trend. Its annual revenue growth has reached 25.5% to 1 billion 220 million 200 thousand euros, and has recorded an increase of more than 20% over the past six years. The retail revenue has increased by 32.4% compared with 2015, and the growth of all categories and regions has exceeded two figures.

Fran ois-Henri Pinault, chairman and chief executive officer of Kai Yun group, said in a statement that as the global geopolitical economy continues to be turbulent, the luxury industry is in a critical period of pformation and pformation. In the coming year, Kai Yun group will continue to focus on organic growth and make strategic expansion to enhance its operating profit margin.

According to the world clothing and shoe net, Kai Yun group's share price has risen. Over the past year, the group's stock price has increased by more than 50%, and its market value is currently about 28 billion 800 million euros.

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Three reasons to stimulate China's market recovery

Over the past few years, China's local luxury market has been very sluggish, especially in Hongkong.

Retail sales in Hongkong declined for the third consecutive year in 2016, and retail sales fell by 8.1% year-on-year, the biggest decline since the Asian financial crisis in 1998.

Online retailers and other emerging retailers also have a huge impact on traditional retailers based on physical distribution channels.

Under the influence of many factors, the retail industry, especially the traditional physical retail industry, has been in a rather depressed state in the past few years.

However, in recent months, many luxury brands in the latest quarterly report invariably say that although sales in Hongkong and Macao are still sluggish, sales in mainland China are excellent.

In the quarter ending in December 2016, the total sales volume of the peak reached an increase of 5%, which was promoted by the strong performance of China and South Korea, and the sales in the Asia Pacific region increased by 10%.

In the fourth quarter of fiscal year 2016, with the constant exchange rate, the sales of comparable German stores Hugo Boss in mainland China increased by 20% over the same period last year, which is the main driving force for the growth of the Asian market.

In the Coach2016 fiscal year of the us light luxury group, sales in mainland China also increased to two digits.

Italy luxury group Salvatore Ferragamo's sales in mainland China in the fourth quarter also increased by 13% year-on-year.

The Richemont sales increased by 5.7% in the previous quarter, while Burberry in the British luxury group increased by 3% over the previous quarter.

The demand for both companies in mainland China has rebounded and tourism consumption has been warmer at the end of last year.

In January, Burberry's share price rose by nearly 10%, thanks to excellent UK performance and China's growth in performance, a 3% increase in retail sales and a beating of expectations.

The watch industry also rebounded. The Swiss watch industry's exports to mainland China have successfully reversed the downward trend in the past two months and achieved a substantial growth.

In December 2016, the overall export situation of the Swiss watch industry continued to rise in November, with exports of 1 billion 700 million Swiss francs, a year-on-year decline narrowed to 4.6%, the best month in 2016, with exports rising 0.6% over the same period last year, the first growth in the past 18 months.

According to Fitch Ratings, there are three main reasons for the luxury market to pick up: the wealth effect of rising housing prices, the decrease in the price gap between Chinese and international markets, and the decrease in overseas travel and shopping.

The wealth effect refers to the effect of the increase or decrease in the stock of money caused by the implementation of monetary policy on the public holding wealth.

The more people have assets, the stronger their desire to consume.

With the rise of housing prices, the total amount of assets held by Chinese consumers has also increased, thus stimulating people's desire for shopping to a certain extent.

Previously, because of the exchange rate and the pricing strategy of the major luxury brands, the price of the same goods in the overseas market in the luxury goods industry is usually much lower than that in the mainland.

But in recent years, in order to promote the sales of the mainland market, many luxury brands have adjusted their pricing strategies, reducing the price gap between the Chinese market and overseas markets.

For example, one of the new strategies adopted by HugoBoss to reverse the situation is to narrow the price gap between the same commodities in various markets.

HugoBoss last year's newly appointed CEOMarkLanger has said that the gap between commodity prices in various markets is caused by a variety of factors, including pportation costs, exchange rate movements and so on.

The group will continue to adjust its pricing strategies in various regions in the future to reduce the price gap between the same commodities in various markets.

The price of Hugo Boss in the Americas will be basically the same as it is now, which is about 20% higher than that in the European market.

The price reduction in Asian markets will reach double digits to ensure that the price in the region is no more than 30% higher than that in the European market.

The average price of goods in the European market will increase slightly.

The Italy luxury group Prada also said at the end of 2015 that it would reduce the price difference between China and the European region from 35% to around 10%-15%.

Chanel also began adjusting global pricing in 2015. To drive the Asian market, the price adjustment made the price in the Greater China region less than 5% of that in Europe.

Chinese tourists have been one of the main buyers of luxury goods in Europe, Japan and Korea.

But in the past two years, there have been many terrorist attacks in France, leading to a sharp decline in the number of Chinese tourists going to France and the whole of Europe, of which the number of tourists to France has dropped by 20%.

The devaluation of the RMB exchange rate also inhibited the desire of Chinese consumers to shop abroad.

In addition, the government has stepped up the regulation of "purchasing by purchasing", making it harder for Chinese local consumers to sweep goods overseas, and more to mainland China's local luxury goods market.

However, Fitch Ratings also mentioned that due to changes in customary habits and the emergence of new retail models, the traditional retailer's business structure and business models must be adjusted in time to adapt to the new market environment.

The recovery of luxury goods market can not completely solve the many problems facing the retail industry.

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