The world's biggest luxury brands are slowing their expansion in China as more consumers shop abroad, leaving mall operators holding the bag. However, lower-priced fast-fashion brands such as H&M and Zara beat expansion goals.
The mid-market retailers are expanding fast, but they are not expanding fast enough to fill all of the shopping centres, according to James Hawkey, an executive at commercial property services group Cushman & Wakefield.
Hermes's understated style is helping it weather a crackdown on corruption in China that has dented the sales of many rival luxury goods makers, the French company said on Thursday.
The maker of EUR15,000 (USD20,400) Birkin bags and EUR500 printed silk scarves saw sales in mainland China rise 19 percent last year at constant currencies and 17 percent in the fourth quarter alone.
With its huge casinos and glittering hotels, Macau has established itself as a top tourist destination for wealthy mainlanders in recent years.
Luxury shopping in China, once known for its obsession with logos, is becoming more fashion-centred with consumers growing more sophisticated and women playing a more prominent buying role, the 2013 China Luxury Goods Market Study released by consulting firm Bain & Company this week says.
The shifts come after the government's anti-extravagance and anti-corruption campaigns dampened the sales growth of menswear and luxury watches, which are traditional gift-giving categories.
Chinese shoppers are cutting back on designer duds, leather handbags and pricey watches, putting a drag on global sales of luxury goods, which a study forecasts to expand just 2 percent this year.
The analysis released Monday by Bain & Company estimated 2013 luxury sales at EURO217 billion (USD300 billion), up from EURO212 billion (USD288 billion) in 2012. The increase is a fraction of the double-digit growth enjoyed the previous three years.
Luxury accessory label Oroton has warded off strong international competition and a sluggish retail sector to grow its full year profit by more than 10 percent.
The handbag and accessory retailer's profit jumped by 10.2 percent to AUD27.5 million (USD26.1m) for fiscal 2013, up from AUD24.9 million in the previous period.
Oroton Group chief executive Mark Newman said 2013 had been a "year of transition" for the brand, which wound up its partnership with Ralph Lauren and signed a new deal with another US label, Brooks Brothers.
The Chinese government's crackdown on luxury goods has hit the world's luxury goods industry but Burberry remains confident of the potential of emerging markets, the UK fashion label's chief executive Angela Ahrendts told CNBC at the London Fashion Week.
Burberry surprised markets last September with news that it expected 2012 sales and profits to slow and come in below expectations. The Asia-Pacific region makes up a sizeable chunk of Burberry's sales, 37 percent of the group's GBP2 billion (USD3.18b) revenues in year ended March 2013.
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.
Hong Kong's Chow Tai Fook Jewellery Group Ltd on Tuesday said revenues in the first quarter of the financial year had jumped 63 percent from the same period in 2012. Sales growth in its stores for gold products soared 78 percent in the quarter ending on 30 June.
Cross-selling on non-gold jewellery and replenishment orders from franchisees were also cited by analysts as driving the sales numbers.
Alexis Babeau has run the luxury division of PPR, which has been renamed "Kering", since 2011. He believes he has the promotion of high-end goods down to a science. "It's about managing exclusivity and growth," he said.
As China's rise enters a new phase, where the middle class is expanding rapidly, Kering, whose Chinese name, "Kai Yun", means open sky, or good luck, will need more than just luck to succeed.