A look at LVMH and luxury buying in China

By Michelle Yeomans

- Last updated on GMT

A look at LVMH and luxury buying in China

Related tags Hong kong Lvmh

Sales this Chinese New Year aren't looking too lucrative for the world's largest prestige group, LVMH, which has been working harder then ever to attract Chinese tourists as luxury spending slowed down in Hong Kong.

Despite reports that Chinese shoppers are the region's biggest buyers of luxury products, LVMH found itself among various prestige players facing a tough fourth quarter last year due to pro-democracy protests.

The Hong Kong protests against mainlanders in the New Territories ran for 79 days last year and kicked off again this month, which has seen anti-graft measures affect sales in China. 

These measures clearly affected LVMH, as the group reported its first fall in operating profit in five years earlier this month.

According to the South China Morning Post, the French player's core earnings fell 5 per cent to €5.7 billion last year, thanks to the likes of the 'anti-graft' drive pushing expensive bottles for gifting out of favour.

'Remaining open'

At the end of last year, LVMH stated that it remained on the lookout for acquisitions in skin care in Asia, but that the priority was with the launch of U.S. beauty brand Fresh on the region, which it has owned since 2000.

When asked by Reuters if the group would be interested in Clarins if it was up for sale, managing director Antonio Belloni said it "favoured smaller businesses with more room to grow."

"We remain open to acquisitions, but for now we are focused on rolling out Fresh in Asia​," the MD told the news agency.

LVMH's portfolio also includes beauty retail giant Sephora and Christian Dior perfumes, which, on the contrary performed well on the region.

Burberry reported to be giving LVMH a run for it's money

Back in 2012, the British fashion brand announced it would be ending its 20-year-old beauty license with Inter Parfums to take the reins of the division in-house.

Burberry is by no means shy about its ambitions to compete with the likes of Chanel and Dior in this category, stating that its vision is to be "a top ten player in luxury fragrance".​ 

Korea is the third-largest market for the luxury player in Asia. Sales from the country alone reached $222 million in 2013.

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