If there is a slowdown in China’s economy, someone forgot to tell the folks at German watch-and-pen maker Montblanc. The luxury retailer launched its biggest store in the world in Beijing this month. Inside the store, customers can perch on a replica palace throne or browse a multimedia installation featuring the namesake of the company’s new Princess Grace of Monaco-themed jewelry collection. The Chinese capital has seen many grand openings in recent weeks, as designer brands race to get in on what is soon to be the world’s largest luxury market. Consulting company estimates China’s luxury good sales will grow 18 per cent annually to reach $27-billion – earning the title of world’s largest luxury-goods market – by 2015. Already, Gucci and Prada make one-third of their world sales in China. The result is over-the-top efforts to acquaint the Chinese wealthy with foreign luxury. French design house Lanvin recently staged an opulent runway show, second only to its Paris Fashion Week show; Giorgio Armani himself came to Beijing for his One Night Only runway show and after-party in the city’s art district. The festivities come against the backdrop of a softening of China’s retail sales growth. Retail sales overall saw their slowest rate of growth last month since February, 2011, at 13.8 per cent year-on-year. Sales of garments were up 19 per cent, down significantly from their 12-month high of 27.6 per cent in September, 2011; jewelry sales rose 18.2 per cent in May year-on-year, compared to a 12-month high of 44.4 per cent in August, 2011.
Slowing economic growth is part of the problem, as are shaky consumer confidence and the tendency of wealthy Chinese to buy abroad rather than paying the luxury taxes on the same, more expensive goods at home. A government-fuelled crackdown on corruption is also making its mark; according to research, as much as 16 per cent of luxury sales over all, and 37 per cent of accessories and... [continues]
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