Chinese tourists shopping abroad have sustained many of the most prominent luxury labels though the European recession. But of the 23 brands in London, Paris, and Milan that Reuters recently surveyed, more than half – including Jimmy Choo, Hermès, and Gucci — reported diminished earnings from tourists, particularly Asian visitors.
Chinese shoppers have accounted for one-third of European luxury purchases generally, and travelers make up almost three-fourths of European watch and jewelry purchases. Now, however, there are signs of a slowdown in spending by the luxury market’s trustiest demographic, Chinese tourists, in Europe.
First-quarter sales results for most brands have yet to publish, but the word on the street does not sound promising. “There has been a noted drop in footfall since the beginning of the year,” said a shopping assistant at a Gucci boutique in central Paris, “It is true, these days we see fewer tourists.”
It’s difficult to pinpoint an exact cause for the slowdown. Aside from the economic and governmental inhibition concerns, the brands themselves may bear some of the blame. Mystery mark-ups have long beleaguered Chinese buyers at home, but prices are creeping up abroad and taking away some of the incentive to shop in Europe. Louis Vuitton raised prices on some of its most popular canvas bags by 10 percent in the euro zone, dreaming of better sales margins. Various clerks have said the current cold and rainy season in Europe may also be a factor – it hardly seems seasonable to be shopping for spring ready-to-wear pieces now.
Reuters reported that if tourist sales continue to fall off, brands with major flagship stores in European capitals such as Burberry, Gucci, Christian Dior and Louis Vuitton, would be most affected. “A drop in tourist demand would impact their like-for-like sales,” said an anonymous London-based luxury analyst.
Not everyone is immediately concerned. “A slowdown was expected and it is just happening,” said a sale assistant at Valextra. Sales slumps are part of the reality for many who have not forgotten that Europe is still in recession. Confesercenti, Italy’s retail association, projected a decline of 10 to 15 percent in this year’s sales to Easter tourists as compared to last year.
Data from tax refund company Global Blue may indicate that tourists are simply moderating their spending abroad. The firm reports that total sales to tourists in Italy rose 7 percent in February, compared with an increase of 19 percent in January and February combined, and a rise of 32 percent in December. Global Blue’s figures for France were more dismal: growth in spending by the Chinese nearly halved between October and February this year to 38 percent from 62 percent. In Switzerland, spending by the Chinese rose 4 per cent during the same period, against an increase of 33 percent the previous year.
photo credit: nicolas