After a continuous decline in 2013, sales of luxury goods have shown no signs of rebounding in China in the beginning of 2014, after a tightened campaign against corruption, the Beijing Morning Post reported on Feb. 12.
Many luxury brands will stop opening new stores in China and the World Luxury Association (WLA) has forecast that some will even close a number of stores in second and third tier cities.
According to financial reports from the WLA members, sales of luxury goods slumped by 50 percent in 2013. The most affected goods are men's wrist watches, sales of which plummeted by 95.9 percent, and men's suits, dropping 60 percent -- once the most popular gifts given to Chinese government officials.
Based on a recent survey from the WLA, the sluggish market also kept inventories high in the luxury stores in the major cities, including Beijing, Shanghai, Chongqing and Shenzhen. Visits to these shops declined during the recent Spring Festival vacation, in spite of widespread promotion of discounted goods.
According to the newspaper, LV and Hermes stores in some cities received no visits at all during the Spring Festival holiday and the Switzerland based Richemont Group reported negative growth in China in 2013.
Giorgio Armani and Dolce & Gabbana have shut down their flagship stores on the Bund in Shanghai, a landmark waterfront, home to a number of buildings from the historical foreign concessions.
According to the WLA, sales of luxury goods during the seven-day Chinese Lunar New Year holiday plunged to a ten year low of US$350 million in Beijing, Shanghai, Chongqing, Guangzhou and Shenzhen, slipping 57.8 percent on the previous year and 80 percent from 2012.
The newspaper added that luxury stores will continue to close as sales fall.
