LVMH, the world’s largest luxury company, will not shut any of its stores here despite a sharp drop in sales and has no plans to exit China contrary to speculation that recent closures there were a prelude to it giving up on the market. The Paris fashion powerhouse disclosed these decisions at its annual results meeting early Wednesday morning. The LVMH group is home to 70 top-end luxury brands including Louis Vuitton, Céline, Loewe, Kenzo, Givenchy, Fendi, Donna Karan, Marc Jacobs, Berluti and Loro Piana. Profit jumped 16 per cent to € 6.61 billion (HK$66.13 billion) in 2015 benefited by sustained growth in Europe, the US and Japan, but Hong Kong, it’s onetime growth engine was a “problematic place”, said the company’s chief financial officer Jean-Jacques Guiony. However, LVMH would still like to keep all its stores in Hong Kong, as Chairman and CEO Bernard Arnault believed the city‘s current downturn is just a “cyclical” problem. READ MORE: Hurt by China economic slowdown, luxury sector can recover if... “In Hong Kong, [there] is no question of closing the few shops that we have,” he said. Instead, the Louis Vuitton brand will start renovations in its flagship store in Landmark, Central. “Hong Kong is a cyclical city as you know, you have ups and downs there. Right now, Hong Kong is going through a trough,” Arnault said. He recalled how at the time when Hong Kong returned to China, the city was “full of Japanese”, but after they left, “the Chinese came instead”, he said. “Hong Kong will remain one of the high points in Asia and one of the drivers of our growth,” he added. However, he admitted the currency concerns among China, Hong Kong and Japan could affect sales in the city, though the loss was mostly offset by strong growth in Japan in the past year. Compared to its name-sake brand Louis Vuitton, DFS, the group’s tourist-oriented brand, is facing more challenges in Hong Kong as fewer Chinese tourists are visiting the city, he said. READ MORE: Just why are Louis Vuitton and other high-end retailers abandoning China? At the same meeting, the luxury brand’s long-time captain also offered an explanation for its recent store closures in China. “If we do this, it is only because Louis Vuitton will open shops elsewhere,” he said, claiming the media coverage about it was closing down in China was not true. “The retail picture is evolving rapidly in China, you have some areas of the country that may be attractive one day, less attractive the next day,” he added. Describing the company’s China strategy as “be at the right place at the right time”, Arnault said leases of poor performing locations will not be renewed when they come to an end. “When new malls are built, the leases are very attractive. [It] might make sense to leave a mall [where business is] not doing so well to go to a new one where you get two or three years free rent. Of course we will take the opportunity” he said. However, he highlighted that “one of the economic challenges in China was the property business that might collapse because of the over building”, as there were already too many shopping malls in China.