LVMH Moët Hennessy Louis Vuitton – the world’s biggest purveyor of luxury goods – has shifted resources out of the luxury shopping mecca Hong Kong for mainland China.
According to Bloomberg sources, LVMH has started the process of moving its regional headquarters from Hong Kong to Shanghai. It has also relocated some top executives to mainland China.
The top global luxury conglomerate will focus on Shanghai, Chengdu, Guangzhou, and Shenzhen markets as Hong Kong’s retail scene slumps.
Hong Kong suffered a series of missteps over the last several years, including anti-government protests in 2019 that kept visitors away, while China’s Covid zero policies limited cross-border activity. This has led to several retailers shuttering retail stores across the metro area.
The pivot by LVMH, which owns brands including Tiffany & Co., Christian Dior, Fendi, and Louis Vuitton, is due to a surge in first-quarter sales as Chinese consumers on the mainland splurged on luxury items as the pace of the world’s second-largest economy gained momentum.
In a post-Covid era, LVMH anticipates that most Chinese luxury spending will be in mainland China rather than Hong Kong. Shopping centers located in duty-free zones like Hainan and the gambling districts of Macau are being swamped by these shoppers, leading to a decline in the importance of Hong Kong as a top luxury shopping hub.
LVMH is following the money.
Fri, 04/21/2023 – 22:00