Chinese shoppers are giving luxury brands some hope
Hong Kong (CNN Business)Chinese shoppers are finally starting to snap up high-end handbags, shoes and jewelry again, giving the luxury goods industry hope that a recovery from the coronavirus pandemic is on the way.
But leading brands still face a tough road ahead, and will likely have to rethink the way they do business to withstand a damaging, worldwide hit to sales this year, as well as a shift in shopping habits in many recession-scarred economies.
Several luxury goods companies reported an uptick in China this spring as people emerged from weeks of lockdowns, spurring what some analysts have called a trend of "revenge spending" — the release of pent-up demand once people aren't forced to stay home.
Tiffany (TIF) this week pointed to China as a bright spot for its jewelry business, saying that retail sales surged around 30% in April and 90% in May compared to the same months last year.
This was despite a drop of about 40% in Tiffany's global net sales in May. "Our business performance in mainland China, which was the first market impacted by the virus, is indicative that a robust recovery is underway," CEO Alessandro Bogliolo said during the company's earnings presentation on Tuesday.