The Economist: Luxury sales dim in China, but prospects glow

“IT WAS an amazing golden age,” reflects Guillaume Brochard of Qeelin, a Chinese jeweller. From 2007 to 2011 many luxury-goods firms enjoyed double-digit annual growth in China, which became their most important market. The first blows came last year, with an economic slowdown and jitters about the political transition. Now, a crackdown on corrupt gift-giving and a populist backlash against ostentation have added to the woes.

The outlook for luxury-goods firms appears to have dimmed. Internet users have posted incriminating pictures, for example of poorly paid bureaucrats wearing suspiciously pricey watches, which have caused heads to roll. Mobs have also disrupted banquets deemed to be too lavish, on occasions forcing officials to their knees to beg for forgiveness.

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Luxury brands gearing up for US expansions: Reuters

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Luxury spending in the United States collapsed after the 2008 financial crisis but roared back to pre-crisis levels by 2012. Last year, the world's No.1 and No.3 luxury groups LVMH and PPR saw higher growth rates in the United States than in China for the first time in years.

To capture those buyers, brands are now expanding beyond New York, which accounts for a third of U.S. luxury sales, and the next two main cities of Los Angeles and Miami.

Last month, Hermes opened in Greenwich, Connecticut - an area popular with financial professionals and their families - and plans to expand in cities like LA, Miami, Houston, Dallas and Boston over the next two years.

PPR's brands, which include Balenciaga, Gucci and Stella McCartney, are looking at Dallas, Atlanta, Chicago, Miami, Orlando and Philadelphia.

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