Gucci’s China shock reverberates across the luxury landscape
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Kering SA, the parent company of Gucci, experienced a significant decline in its market value following a warning about slumping sales of Gucci products in China. Swiss watch exports to China also tumbled last month. Chinese luxury shoppers have become more selective about where to spend their cash due to rising unemployment and a property downturn. Gucci has seen a drop in Chinese online sales, and its new designs are receiving mixed reviews. Kering is highly vulnerable to shifts in taste as Gucci accounts for about half of its sales and more than two-thirds of profit. Other luxury brands are also being affected by the slowdown in China. Some brands may need to reduce their reliance on China and look to other regions for growth. Prada and Hermes have seen growth in the Asia-Pacific region, while Rolex, Chanel, and Louis Vuitton have experienced slower sales in Hong Kong. The demand situation in China is proving tough, and Chinese tourists are not spending as much in Hong Kong, Macau, and Singapore. Some luxury brands are reconsidering their Asia strategy and looking beyond China for future growth.

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https://m.economictimes.com/news/international/business/guccis-china-shock-reverberates-across-the-luxury-landscape/articleshow/108751109.cms