[ad_1]
NEW YORK (AP) – There was something missing from luxury jeweler Tiffany & Co. in recent months: Chinese tourists.
For the second time in as many months, a large seller of high – end products has found that a particularly crucial demographic segment of its mall has been rarefied, harming sales and fueling fears of "losing money". an aggravation.
On Wednesday, Tiffany & Co. shares plunged 12% after posting weaker than expected sales in the third quarter. Managing Director Alessandro Bogliolo said that Chinese tourists did not show up and that they did not open their wallets with the same vigor as in the past.
Last month, the owner of Louis Vuitton pointed out the same phenomenon of decreasing the number of Chinese tourists. The shares of this company have also been hit hard.
Tiffany is considered a pillar of luxury goods. That's why the shares of Ralph Lauren and Movado also fell on Wednesday, even as the stock market has risen sharply.
Tiffany 's business volume for the third quarter grew 4%, to reach a little over a billion dollars, but industry analysts expected a larger increase. Part of the surprise was the decrease in the number of tourists, especially Chinese, in New York and Hong Kong stores.
"We do not see slowing demand from the Chinese, what we are seeing is that Chinese tourists are traveling less," Bogliolo said during a telephone interview on Wednesday.
In fact, Bogliolo said Tiffany 's mainland China business remained strong, recording double – digit sales growth throughout the year. In response to this change, Tiffany's is increasing its inventory in its stores located in mainland China so as not to lose any sales.
Bogliolo hypothesized that the decline in Chinese tourists was due to the deterioration in the value of the Chinese currency.
The yuan, also known as the renminbi, or "money of the people", reached its lowest level in ten years against the dollar at the end of October. It has slightly strengthened this month, suggesting that Beijing has intervened to curb its slide.
But others see wider issues at stake, including a smoldering trade war and the potential for a slowdown in the global economy that weighs even on the wealthy in China.
"Our political relations with the Chinese government are very tense," said Robert Burke, a luxury consultant in New York. "It does not put them in the mood to come to the US to spend their hard-earned dollars.They have the opportunity to buy in mainland China."
While the number of Chinese visitors from China increased by 4% in 2017, according to the US National Tourism and Tourism Board, it was down significantly from the 16% jump recorded in 2016.
This is not a healthy trend for sellers of high-end products.
Burke estimates that nearly 30% of luxury goods sales in the world are destined for Chinese tourists. Dan Jasper, a spokesman for Mall of America, the country's largest mall, said Chinese tourists tended to buy more high-end items, including luxury cosmetics, jewelery, clothing and electronic devices. He said the number of Chinese tourists in the center continued to grow at a "modest rate".
On Wednesday, which may have exacerbated the fears, is that, according to the prevailing wisdom, consumer spending from China in the luxury high-end boutiques of the West would not continue, but that they would increase.
In a study published this month, consulting firm Bain said that Chinese consumers will supply nearly half of the world's high-end sales by 2025.
Chinese buyers will account for 46 percent of global luxury sales, estimated at $ 412 billion in just six years, said Bain in his study, which had been prepared for the Italian Altagamma association of upscale producers.
Even before the Trump administration intensified its trade dialogue with Beijing, there were signs that economic growth was slowing in China.
China's economic growth slowed to a low of 6.5% after the global crisis compared to the end of September. A trade dispute with the Trump administration is putting pressure on communist leaders for that they are boosting economic activity that has weakened since Beijing put a halt to bank lending l '. last year while he's trying to contain the rising debt.
It is too early to say whether the series of lower-than-expected sales of luxury merchants will continue or whether it is an obstacle on the road.
There were other signs of weakness at Tiffany, such as sales in comparable stores, which are closely watched by industry analysts.
Tiffany's quarterly profit of $ 94.9 million, or 77 cents per share, was actually a dime better than expected, according to analysts surveyed by Zacks Investment Research.
The slowdown in Chinese tourists was offset by strong demand from local customers in the North American market, as the luxury supplier modified its products and marketing to attract a younger customer.
However, the company has maintained its annual earnings guidance of between $ 4.65 and $ 4.80 per share, suggesting that some shifting geopolitical agreements or a declining world economy may soon become a more serious threat.
_____
Dee-Ann Durbin, Associated Press Business reporter in Detroit, contributed to this report.
___
This story has been updated to correct the spelling of the Mall of America spokesperson. That's Dan Jasper, not Jaspers.
Source link
