'Explosive' sales make China 'great again' for Louis Vuitton after consolidation to stem downturn, says CEO
Michael Burke also says investment in revamping Hong Kong stores is paying off, and rates one of its stores in the city higher even than brand's flagship Paris store
It’s fair to say the all-important Chinese market for luxury goods has seen some volatility of late. Retail CEOs and finance chiefs have been wringing their hands over a fall in sales in China and Hong Kong. But the man leading one of the world’s most recognisable luxury brands, Louis Vuitton, doesn’t seem at all worried. In fact, he sees the tide turning.
“Oh my, the last six months, it’s explosive in China now,” says Michael Burke, Louis Vuitton’s dynamic chairman and CEO, of the brand’s sales. He won’t put a number on that before official reports come out, but says with a knowing nod: “You’ll see.”
Twelve months ago, Burke talked to the Post about the slowing growth in sales of the brand, along with other luxury labels, in the wake of a Chinese government crackdown on excessive gift giving and corruption. He also noted a sales slowdown in Hong Kong, which he attributed to a loss of confidence on the part of local shoppers and a fall in the number of high-spending visitors from China. Burke argued at the time that this was a healthy development and had removed the froth (an unhealthy and unsustainable surge) from the market.
“Today, for us China is great again. It’s exactly what I predicted,” he says. “The froth will be eliminated by the market, and the real buyers, the upper middle classes and middle classes, will lead a consumer boom in China.”
Looking back, he says: “The crackdown on government gifting flushed out the system, which was a good thing. [Chinese President] Xi [Jinping] did it, he had to do it. He took a lot of flak for it, but he had to do it.”