Luxury spending in Europe hit by drop in tourist demand
By Astrid Wendlandt
PARIS (Reuters) - At the seven-story retail temple that is Louis Vuitton's flagship store in Paris, there are signs of a slowdown in spending by Asian tourists - the recent driving force in a European luxury market defying recession.
"We don't have as many Chinese as before," said one shopping clerk at the world's biggest luxury brand by sales. "I think the whole year is going to be slow."
And Louis Vuitton, owned by industry leader LVMH, is not alone. Over half of 23 brands surveyed by Reuters at stores in London, Paris and Milan - including Gucci, Hermes and Jimmy Choo - reported lower demand from tourists, notably from Asia.
That could be a big problem in a European industry where Chinese shoppers account for about one third of luxury purchases, and where travelers represent up to 70 percent of buyers in segments such as watches and jewellery.
Most luxury goods groups will not publish first-quarter figures until at least later this month and LVMH declined to comment on tourist spending patterns.
But anecdotal evidence is growing of at least a temporary slowdown in spending by travelers, which analysts say could be linked to worries about the global economy and tax increases in Europe, as well as the tough stance taken by China's new president Xi Jinping on illegitimate gift-giving.
Brands whose store clerks told Reuters they had seen fewer tourists in recent weeks also included Bottega Veneta, Chloé and Christian Dior in Paris; Longchamp and Ermenegildo Zegna in London and Valextra in Milan.
"We have seen a slowdown in tourists buying, particularly Asian tourists," a saleswoman at a Christian Dior shop, another LVMH brand, in central Paris said. "The trend was fairly solid until September-October 2012 then it slowed down progressively". Continued...