KazPost

Kazakhstan News
Monday, Jan 30, 2023

China-addicted luxury stocks cheer Beijing’s looser COVID curbs

China-addicted luxury stocks cheer Beijing’s looser COVID curbs

Shares in global luxury goods groups, which rely heavily on Chinese shoppers, rose on Tuesday after Beijing further relaxed some COVID restrictions that had been in place for the past three years, fueling hopes of a full-blown reopening soon.
China will stop requiring inbound travelers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday in a major step towards easing curbs on its borders, which have been largely shut since 2020.

News of the loosening lifted stock markets worldwide, with luxury shares in particular benefiting. Shares in LVMH , the world’s biggest luxury group and Europe’s number 1 company by market capitalization, were up 2.7 percent while Cartier-owner Richemont rose almost 4 percent.

China, which is gradually moving away from a strict zero-COVID-19 policy that battered its economy, kept consumers indoors and sparked a wave of public discontent, accounts for 21 percent of the world’s 350-billion euro luxury goods market, behind North America and Europe.

Before the current slowdown, it had for years been the fastest growing region, with young, urban, middle class professionals powering the luxury market by splashing out on Hermes’ 10,000 euro-plus ($10,633) Birkin handbags and Gucci’s 1,000 euro fur-lined loafers.

It is expected to become the top market for the industry by 2025 and already generates about 35 percent of annual sales at Gucci, French group Kering’s star brand, 27 percent for rival LVMH’s fashion and leather goods division and 26 percent for Hermes.

With Europe facing an energy crisis and the US economy also cooling due to higher interest rates, China is looking to a recovery next year and the luxury world is hoping to take advantage of that.

However, some analysts said investors should not get carried away.

“With infection rates still increasing (in China) it won’t necessarily mean international trade will snap back to pre-pandemic levels super quickly,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“Recovery may still be slow, particularly given the caution among consumers, and is likely to build in popular holiday shopping destinations regionally first,” she said. “Brands will be gearing up for the return of wealthy, globetrotting Chinese tourists.”

According to a recent report by the McKinsey consultancy, while non-luxury fashion sales are expected to rise between 2 percent and 7 percent in 2023, luxury sales should climb 9 percent to 14 percent over the same period.

“China will likely remain a core market for fashion consumption in the long term, with significant untapped opportunities among a customer base whose sentiment for luxury brands in particular is holding strong,” it said.
Newsletter

Related Articles

KazPost
Close
0:00
0:00
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
Tesla reported record profits and record revenues for 2022
Germany confirms it will provide Ukraine with Leopard 2 tanks
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Tesla slashes prices globally by as much as 20 percent
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
Lisa Marie Presley, singer and daughter of Elvis, dies aged 54
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Dirty bomb fears as URANIUM is found in cargo at Heathrow
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
Saudi Arabia set to overtake India as fastest-growing major economy this year 
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
Hong Kong property brokerages slash payrolls in choppy market
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Effect of EU sanctions on Moscow is ‘less than zero’ – Belgian MEP
Dubai announces $8.7 trillion economic plan to boost trade, investment and global hub status
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
A Republican congressman-elect is under investigation in New York after he admitted he lied about his education and work experience.
Brazilian football legend Pele, arguably the greatest player ever, has died at the age of 82.
Hong Kong to scrap almost all its Covid rules
EU calls screening of travellers from China unjustified
US imposes Covid testing for visitors from China
Ukraine President Volodymyr Zelenskyy Addresses Joint Session of Congress - FULL SPEECH
Where is Rishi? Chancellor Jeremy Hunt's excuses about the UK's economic challenges just don't make sense
Former FTX CEO Bankman-Fried finally arrested in Bahamas after U.S. files charges
Corruption works: House Financial Services Chair Waters doesn't plan to subpoena her donor, Sam Bankman-Fried, to testify at hearing on FTX collapse
Ronaldo's new contract...
Tax fraud verdict again exposes illusion of Trump the master businessman
Tax fraud verdict again exposes illusion of Trump the master businessman.
Double standards: UK lawmakers attack EU chief over Ireland claims
Yellen hints at ‘national security’ probe into Twitter purchase
Elon Musk reinstates Donald Trump's Twitter account.
George W. Bush and Barack Obama will hold back-to-back disinformation conferences
Miss Argentina and Miss Puerto Rico are not single anymore
Boris Johnson is about to sign a contract with an American company to get millions for giving speeches. Something he did until very recently for free.
Solar + Powerwall ensures you never lose power, even if the grid goes down
Bavarian Prime Minister Söder: "There is no reason for mask obligations, no lockdowns anymore”
MSNBC tries to discuss the January 6th events with a focus group
Europeans don't want to starve and freeze for Zelensky and Ursula von der Leyen.
×