Luxury retailers Hermes, Kering and Moncler report resilient revenues despite Hong Kong protests, as Chinese consumers increase spending at home
- Luxury brands report gains in mainland China even as Hong Kong sales drop
- Moncler is negotiating for potential rent reductions and is looking to postpone or reduce expenses in Hong Kong
Luxury goods retailers such as Hermes, Kering and Moncler reported resilient revenues in the third quarter despite hefty sales declines at their Hong Kong locations, as months of protests and civil unrest deterred tourists from visiting the city during one of its worst political crises.
Kering, the owner of Gucci, Yves Saint Laurent and Bottega Veneta, said sales at its brands’ Hong Kong stores fell 35 per cent in the three months ended in September, but its Asia-Pacific revenue was up by 18 per cent in the third quarter. Gucci stood out with sales in its directly owned stores in Asia up by 17.9 per cent on a comparable basis.
John-Marc Duplaix, the Kering chief financial officer, said mainland China and South Korea posted high growth rates in line with or slightly above the second quarter, particularly as more Chinese buyers bought luxury goods at home, rather than travelling abroad for purchases.
Among mainland Chinese buyers, “the repatriation of purchases continued, with domestic purchases accounting for half of the worldwide spend”, Duplaix said on a conference call on Friday.
Overall, Kering said its revenue rose 14.6 per cent to €3.88 billion (US$4.31 billion) in the quarter. Hong Kong accounted for a much lower percentage of Kering’s retail sales – less than 4 per cent in the quarter versus about 6.5 per cent of retail sales for all of 2018, Duplaix said.