Tuesday, April 29, 2014

I'll take a Number 2, Hermes bag to go...

Probably the most under-reported story of the year is the faltering Chinese consumer.  This really deserve a full post at some point but just remember that Chinese consumers are starting to see their first property value declines in the past decade and given the amount of leverage many of these consumers are dealing with the implications are huge for the world's second largest economy.

To that end, see this story which seems to blame the anti-corruption campaign but I think there is something more afoot....

"They are well-known rules of Hermès—no sales; no selling at shopping malls. But these rules went out the window when Hermès held a discount sale last Tuesday to clear unsold stock at the Hyatt Regency Hangzhou. 
Sales growth rates for many luxury brands have dried up following China’s ongoing anti-corruption campaign, as gifting and lavish entertainment are scrutinized. 
“It has been rough for luxury goods this year,” an unnamed department store manager told MSN Luxury. “The accumulating unsold stock caused by plummeting sales is a cause of concern for the brands too.” A recent article in Want China Times states that Hermès carried discounts of 20 to 50 percent."
Cheers!

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