Luxury brand sales in China fall over 10% after government taxes overseas wealth

Money & Banking··CNMO·Read original
3▲0 ▼5Impact / 5
Summary · why it matters

Sales of 25 major luxury brands in China fell more than 10% in July compared with the same period last year, after the Chinese government tightened controls on capital outflows and imposed taxes on overseas assets and investment gains. Brands under LVMH such as Louis Vuitton and Dior, as well as Kering's Gucci, Bottega Veneta and Balenciaga, all saw double-digit sales declines, while Hermes swung from growth to contraction, and Chanel and Prada also saw growth slow significantly. Jacques Roizen, co-founder of Foresight Performance Partners, said operators are seeing VIP customers spend more cautiously after the wealth effect diminished, coupled with a tougher tax environment for high earners. The impact has also spread to Macau, where casinos reported June and July revenue fell more than the market expected, as high rollers travelled less and reduced their betting limits.

Impact on assets 5

Consumer Discretionary▼ · 5 stocks
Christian Dior SE
CDI
▼ NegativeDemandrelevance

Dior, under LVMH, saw double-digit sales declines in China as government taxes and capital controls dampened luxury demand.

Kering SA
KER
▼ NegativeDemandrelevance

Kering's Gucci, Bottega Veneta, and Balenciaga all experienced double-digit sales declines in China.

Hermes International SCA
RMS
▼ NegativeDemandrelevance

Hermes swung from growth to contraction in China as luxury demand weakened after government tax measures.

Prada SpA
1913
▼ NegativeDemandrelevance

Luxury sales in China fell over 10%, with Prada's growth slowing significantly due to reduced consumer spending.

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