Luxury sector hit as some wealthy consumers exit China

|By:, SA News Editor

A new survey on luxury spending by wealthy consumers in China indicates a soft demand trend may continue.

Spending on gifts fell 25% last year, while overall spending by the wealthy fell 15%.

A number of factors are in play with Chinese consumption taxes high and the government cracking down on corruption, but the underlying trend is that a surprising number of high net worth consumers are leaving China for new residences overseas.

The good news for the sector is that some of the lost sales could be recaptured in different markets.

Related stocks: Gucci (GUCG), Prada, Louis Vuitton (LVMUY), Coach (COH), Ralph Lauren (RL), Michael Kors (KORS), Swatch (SWGAY), Burberry (BURBY), Louis Vuitton (LVMHF), Tiffany (TIF), and Warnaco (WRC).