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April 11, 2017 — 14:10

Burberry: China’s domestic market luxury goods differentiation Burberry LV brakes –

China’s domestic market this year, luxury goods show split Burberry LV “brakes”: Earlier, luxury brand Burberry profit warning, the market worried about the prospects for luxury goods. However, PRADA (Prada, Hong Kong stocks 01913) recently announced interim results, no doubt for the entire market into a tonic.
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PRADA in the first half of this year’s performance shows that its interim net profit of 286 million euros, a substantial increase of 59.5%, the global region of various types of merchandise sales have increased significantly, which is particularly strong growth in the Asia-Pacific region, becoming the company’s fastest growing Region, net sales increased by 44.7%. Analysts said that with super purchasing power of Chinese consumers is still supporting the absolute growth of the global luxury goods.

Although PRADA mid-term data show its strong growth, but in fact from mid-August, luxury brands appear different performance. Some media pointed out that the brand specifically manufacturing lower-priced products are suffering from the economic downturn, but the high-end line of the brand growth is still good, Hermes last month to increase its 2012 sales growth target to 12%.
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Mid-year report shows that the first half of the region to achieve growth, the Asia-Pacific region thriving, becoming the fastest growing region of the company. Data show that Asia-Pacific market growth and production are high, net sales of 532.5 million euros, an increase of 44.7%, accounting for 34.9% of net sales, compared with the same period last year increased by two percentage points. According to reports, its growth is almost entirely from the retail channel. The media said that due to strong growth in the Asia-Pacific region during the period, PRADA Chief Executive Officer Patrizio Bertelli said in an analyst meeting throughout the year to maintain same-store sales growth double-digit target.

As the second largest market, net sales in Europe totaled 348.7 million euros, accounting for 22.9% of total net sales, up 39.1% year on year. The report shows that the main reason is that the depreciation of the euro led to the continued growth in the number of passengers.
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In the category of goods, leather goods sales rose 52%, clothing and footwear sales were up 17% and 14%. Geographically, sales in the Asia-Pacific region rose 44%, while the European region due to consumer spending, revenue increased by 31%, Americas sales rose 30%, Japan rose 34%.

Luxury goods sales weakness and other reports meet the newspapers, and luxury professional researchers believe that luxury consumption is not so much slow, it is better to say that the luxury market differentiation. In fact, since 2012, jewelry, watches, cars, luggage and other industries a number of high-end brand data show that the Chinese market performance in the years after the accelerated growth has begun to show signs of decline in growth.

Reporters learned that the luxury brand Burberry in the second quarter of this year (first quarter) sales rose 18%, while in the previous six months, the growth rate of up to 34%. Due to the Asia-Pacific market downturn led to Burberry performance is not expected, the release of Burberry shares in the London market fell 7%. Also in the Asia-Pacific market performance “brakes” and luxury goods giant LVMH Group, although the overall sales in the first half to maintain growth, China’s sales performance has been a rare slight decline.

Foreign Economics and Trade University Xiangqi luxury research center researcher Faye Wong told this reporter that the brand well-known luxury brand will be more resilient, “the whole economic expectations is the main reason for the impact of luxury sales, and seasonal factors relative impact less”.

The current 25 to 40-year-old young people in the luxury consumption of a higher level of maturity, “because of its overseas experience and high-end consumer experience, coupled with their ability to accept new things quickly, so the consumer groups are relatively mature ”

Some analysts pointed out that in China’s economic slowdown in the case of short-term irrational, external conspicuous luxury consumption will be subject to certain inhibition. At present, those who are more personalized, with cultural connotations and can maintain a constant value, and advancing with the times the luxury brand to win the favor of China’s high-end consumers.

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