Photo via Hermés
New leadership in China has limited spending public funds on luxury gifts, hitting some major designers where it hurts. Brands such as Louis Vuitton, Cartier and Hermés are predicted to see limited growth over the next few years as the the Communist party seeks to reduce the amount of corruption cases sparked by misappropriation of public funds.
Surprisingly, China is a major marketplace for these designer brands. A recent estimate states that around half of Hermés’ global sales come from the People’s Republic of China. In years past, a slowdown in Chinese consumption would not have been such an issue, but with a growing economy and demand for Western goods, China has become a powerhouse consumer in the luxury sector.