High-end retail chains are increasingly looking at existing and new hotels to house their brands in India, according to experts tracking the sector. While some brands have traditionally been located in five-star hotels, retail chains were seen opting for malls in the last few years. However, absence of quality real estate is once again pushing retailers, especially the luxury and niche brands, into the cool comfort of hotels.
The Oroton Group, Australian luxury accessories retailer, has reported a net profit of AUD16.4 million (USD17m) for the six months to 26 January, a 2.1 percent rise from the previous corresponding period, as group revenue lifted by 2.4 percent.
Oroton's CEO Sally Macdonald said the firm's results were solid given the challenging retail environment, international competition and amount of discounting.
Louis Vuitton, the world's biggest luxury brand in terms of sales, is planning to dampen its expansion worldwide and focus on high-end products to preserve its exclusive image, according to Bernard Arnault, CEO of parent LVMH.
Arnault said Louis Vuitton, which recently launched a major television ad campaign, was not planning to open boutiques in second and third-tier cities in China to "avoid becoming too commonplace."
Luxury brands are increasingly reclaiming distribution rights from their Chinese agents to assert tighter control of sales channels and better meet the growing sophistication of shoppers in the world's biggest luxury market.
The latest example is UK fashion house Jimmy Choo, which has acquired its China business from partner Kutu.
Chinese consumers are now the world's biggest buyers of luxury merchandise, according to a report last week by management consultancy McKinsey, while another consulting firm, Bain and Company, found they account for a quarter of all such purchases globally.
This year growth has been restricted by slowing expansion in the Chinese economy and repressed gift-giving among and between officials and businessmen – a key element of building relationships, even at middle and lower levels.
While Tokyoites – possibly the world's most dedicated shoppers – continue their long love affair with futuristic shopping malls and starchitect-designed flagship fashion stores, a new and innovative breed of small-scale luxury retail villages is proving popular with young and old alike.
Those inside the luxury fashion industry know that established brands are losing their connection with the next wave of Chinese consumers.
Top and low-key premiums and emerging luxuries will see a boom in key cities, while mass premium brands will continue to grow in second- and third-tier cities, according to Zhou Ting, executive director of the research centre for luxury goods and service of University of International Business and Economics.
Until very recently, nouveau riche Chinese would not have been caught dead buying someone else's cast-offs – even if they were Hermès.
But as the Chinese market, which many luxury goods companies have come to rely on for growth in recent years, matures, a new brand of luxury shopper is emerging in China: the kind that loves a bargain more than a logo.
Increasing numbers of luxury goods groups are targeting Indonesia, despite the major challenges which face companies seeking to progress in the country.
Gucci, a unit of PPR, is developing a flagship store in Jakarta with a floor space of 5,500 square feet, as it attempts to exploit the favourable trends observable in the Asian nation.
Hermès, the French luxury group, opened its third store in Jakarta earlier this month, specialising in high-end watches, while Fendi, owned by LVMH, has also unveiled two new sites in Indonesia in 2012.
German fashion house Hugo Boss said second-quarter sales in China rose just 1 percent, as shoppers once hungry for luxury purchases stay away from shopping malls.
"Consumer sentiment continues to be shaky, with many customers cancelling or postponing luxury purchases," Chief Financial officer Mark Langer said after Hugo Boss reported quarterly results.
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