Compared to LVMH’s slowdown in growth in the first quarter, its main competitor Kering is not as lucky.
According to Bloomberg, Kaiyun Group announced on April 23 that it expects its recurring operating profit to decrease by 40% to 45% in the first six months of this year. Due to weak demand in China, the comparable sales of Gucci, a brand under the group, decreased by 18% in the first quarter.
Armalle Poulou, Chief Financial Officer of Kaiyun Group, said that the Chinese market is currently clearly polarized, with consumers either liking very high-end products or more affordable ones, while Gucci is in between and has not benefited from the polarized consumer demand.
This can be seen from Herm è s sales revenue. According to Reuters, Herm è s saw a 17% surge in sales in the first quarter, exceeding market expectations and maintaining the rapid growth of the previous quarter (including China); Except in Japan, sales in the Asian region increased by 14%. The handbags sold by Herm è s usually cost over $10000.
In fact, Herm è s also feels the market fluctuations brought about by weak consumption. Eric du Halgouet, Executive Vice President and Chief Financial Officer of Herm è s, stated that in March after the Spring Festival holiday, Herm è s experienced “lower” customer traffic in the Chinese market, but strong demand from affluent customers offset the decrease in low-priced orders.
It can be seen that whether it is Herm è s, which is not worried about performance, LVMH, which is experiencing a slowdown in sales, or Kaiyun, which is expected to see a sharp decline in profits, China’s every move and development can be felt at any time.
