In China, the Devil doesn't wear Prada

Mon Sep 16, 2013 5:03pm EDT
 
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By Donny Kwok

HONG KONG (Reuters) - The Devil, it seems, wears anything but Prada in the eyes of Chinese bloggers determined to expose corrupt government officials flashing luxury labels way past their pay grades.

Prada is among a few premium brands reporting solid growth in the world's second largest luxury market even as a government campaign against conspicuous spending and gift-giving hurts firms with instantly recognizable brands like LVMH, Compagnie Financiere Richemont and Kering SA.

The logos on Prada's deluxe leather handbags, wallets and shoes are, by and large, low-key and these days, discretion is key in China.

This month, the government jailed a provincial official for 14 years for corruption after pictures of him wearing expensive watches - including what bloggers said was a Vacheron Constantin - became a hit on the Internet, earning him the nickname "Brother Watch".

Richemont owns several leading luxury watch companies including Vacheron Constantin, Cartier and Piaget, and earlier this month said demand in China had weakened.

"Some companies, like Richemont, had a lot of exposure to sectors that have taken a big hit in China this year, especially luxury watches," said James Roy, senior analyst at China Market Research Group in Shanghai.

"Many luxury clients here are moving away from more loud or bling-focused luxury brands like Gucci or Louis Vuitton, towards things that are a bit more subtle and sophisticated without the flashy logo," he added.

LVMH's Louis Vuitton and Kering-owned Gucci, which won over legions of fans with their visibly branded products, have recently moved away from the logo-look and are now offering more upmarket leather handbags.   Continued...

 
Shoppers walk past a Prada store at Hong Kong's shopping Tsim Sha Tsui district September 16, 2013, one day before the Hong Kong-listed Italian fashion label announces its 2013 first-half results in the territory. REUTERS/Bobby Yip