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LVMH sees more Chinese buying luxury goods abroad

LVMH Moet Hennessey Louis Vuitton (MC.EPA) said Chinese consumers are increasingly buying its luxury goods abroad due to cheaper prices, raising concerns that mainland China is heading for a slow-down in luxury-goods consumption, The Wall Street Journal reported. Sales in LVMH’s fashion and leather-goods division slowed to 10% in Asia (excluding Japan), while European and US sales grew by 12% and 18%, respectively. “There was a lower [growth] figure in mainland China than for the overall [Chinese] customer base,” said Jean-Jacques Guiony, chief financial officer of LVMH. He did not think this is a permanent shift in Chinese spending to the continent. The Chinese purchasing spike abroad followed the Lunar Yew Year, during which many Chinese travel and splurge on luxury goods to avoid domestic taxes of around 30%. China’s Ministry of Commerce said it wants to lower the tax rate on imported goods to attract spending back to China. Meanwhile, luxury-brand groups are still seeing “very healthy” growth in China, said Thomas Chauvet, Citi’s European luxury goods analyst. 

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