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Consumer spending in China is down, and luxury brands are feeling the hit. Brands like Balenciaga, Burberry, and Marc Jacobs have offered big discounts to reel customers back in. But experts warn that discounting could diminish these luxury brands' desirability.

Luxury brands like Marc Jacobs, Burberry, and Balenciaga have been offering big discounts in China to try to reel in customers following a drop in sales figures. This week, Hugo Boss, Burberry, Richemont, and Swatch Group all reported slumping sales in China . Hugo Boss said in its preliminary Q2 financial results on Monday that the Chinese market was "particularly challenging.



While British fashion house Burberry's sales in mainland China fell 21% year-over-year in the most recent quarter. The slumping demand has led some brands to offer hard discounts in China to shift excess stock. The FT reported that in early July, Marc Jacobs was offering discounts of more than 50% on Alibaba's upscale e-commerce platform, Tmall Luxury Pavilion.

Bloomberg reported that Balenciaga — owned by luxury conglomerate Kering — averaged a 40% discount on sale items in three of the first four months of 2024. And that Burberry was also slashing prices in China. Business Insider contacted Burberry, Balenciaga, and Marc Jacobs for comment but didn't immediately hear back.

These brands are dropping prices in the face of a softer market in China, Bernstein luxury goods analyst Luca Solca told Business Insider. Consumer spending is lagging .

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