Hugo Boss, Burberry, Richemont, and Swatch have all called out slumping sales in China this week as consumers cut back on luxury spending. Hugo Boss said in its on Monday that the Chinese market — a key one for the German fashion brand — was "particularly challenging." British fashion house Burberry's sales in mainland China fell 21% year-over-year in the most recent quarter, which board chair Gerry Murphy to "deteriorating consumer confidence" in an investor call on Monday.
The Chinese market had been "weaker than we expected," he said. Swiss watch group Swatch said it expects the Chinese market "to remain challenging for the entire luxury goods industry until the end of the year." China, the world's , is a key market for luxury brands.
Bain & Company in a report earlier this year that China's luxury market tripled in size between 2017 and 2021, but suffered a sharp decline in 2022 due to the impact of COVID-19 restrictions. There was a "significant" rebound in 2023 as lockdown restrictions were lifted. But much of this spending has been overseas, and sales in China have fallen for some of the world's biggest luxury brands.
Here's why they've been struggling. Economic growth is slowing grew just 4.7% year-over-year in the second quarter of 2024, missing forecasts and slowing from the 5.
3% growth reported by officials in the first quarter. Shoppers simply haven't been spending enough money: Sales of clothing, shoes, and hats were down 1.9% in June year-over-year, per , de.