China’s metrosexual men revive luxury shopping
HONG KONG/MACAU |
HONG KONG/MACAU (Reuters) – Let’s hear it for the boys. China’s fashion-forward men are snapping up Gucci and Burberry bags, driving a rebound in the luxury market months after a slow down in spending by the world’s biggest luxury goods buyers spooked global investors.
Men account for about 55 percent of China’s luxury goods market, well above the global average of 40 percent, according to research from brokerage CLSA, partly because businessmen often buy expensive gifts to curry favor with government officials or potential associates.
Companies such as Burberry Group Plc which sell luxe clothing and accessories benefit from this gift-giving culture, and wealthy Chinese men’s penchant for designer ware.
But they are also at risk of big sales swings because men are less likely than women to splurge on discretionary purchases in times of economic uncertainty, CLSA’s research shows.
“Men are not prone to impulse shopping,” said Mariana Kou, CLSA’s consumer and gaming analyst in Hong Kong. “They tend to wait a little if the economy is pretty uncertain.”
Chinese shoppers account for one-fourth of all luxury purchases globally and last year surpassed U.S. consumers to become the world’s top spenders on luxury goods, according to consulting firm Bain Co.
When China’s economic growth slowed to a three-year low in the middle of last year, luxury demand dropped suddenly, sending shudders through a global market worth $280 billion last year according to Bain’s estimates.
Burberry warned of weak sales in July and again in September, sparking fears of a sector-wide slump.
But as China’s growth picked up to 7.9 percent in the fourth quarter after seven straight quarters of slowdown, sales rebounded. Burberry said last week its Asia-Pacific sales rose 15 percent in the three months to December, led by China and Hong Kong, while its European business was flat and the Americas up just 2 percent.
Sales of men’s clothing were up more than 50 percent over the final three months of 2012, Burberry said, and men’s accessories such as handbags rose nearly 40 percent.
“We remain very confident about the growth prospects for the China market generally,” Burberry’s Chief Financial Officer Stacey Cartwright said after the quarterly data was announced.
“Specifically quarter by quarter it’s always difficult to call. We are encouraged by the rebound that we’ve seen in this quarter,” she added.
HEY BIG SPENDER
Burberry’s bounce-back lifted the shares of its high-end peers. The Dow Jones luxury index rose 2.1 percent last week and is up 6 percent so far this year, double the
Article source: PRNewswire
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