The domestic Chinese market for luxury goods may be struggling, but investors shouldn’t discount the huge amount of high-end products Chinese tourists buy, as the forecast-beating results from Kering – owner of Gucci – testify.
Luxury goods maker Kering gave the markets a pleasant surprise on Friday as earnings at its flagship Gucci luxury brand thrashed expectations and raised hopes of more good things to come as more new designs are set to be introduced this year.
Gucci revenue advanced 4.8%, compared with the 1.5% growth analysts anticipated – the brand’s strongest result in three years. However, while the company reported that conditions in Hong Kong and Macau (China’s luxury market bellwethers) were still lacklustre, there is hope for the sector more broadly.
The domestic Chinese market for luxury goods may be struggling, but investors shouldn’t discount the huge amount of high-end products Chinese tourists buy.
Indeed, they spent $116.8 billion (£87 billion)) on luxury when abroad in 2015, according to China Daily.