
Specifically to buy luxury goods in Europe, visitors may find that prices are no longer cheap, because of the Louis Vuitton Group (LVMH) and its peers are to raise prices to compensate for loss of business, as well as other countries, lower profits, CA Cheuvreux European securities department is responsible for people Luka • solca, Luca, Solca said: “You can not continue to maintain the existing difference, this spread has been in the past 20 or 25 years, the luxury goods industry rely mainly on luxury goods company is expected to gradually narrow the price difference, which is likely by raising the price outside of Asia to achieve. “
As China is expected to occupy one-third of the global luxury industry growth, but the markets are weak revenue growth will be the risk of performance improvement, with the appreciation of the renminbi value of China’s regional sales will improve. Solca is estimated that in China, accounting for EBIT profit profit luxury goods sales ratio of 40%, while in Europe the proportion is 25%, mainly because of lower rents. According to HSBC analyst of Bei Erji of Antoine Belge estimated that tourists (mainly from Asia) accounted for 35-60% of the sales of luxury goods in Europe.
LVMH Chief Financial Officer – Jean-Jacques Guiony exchange rate changes, in the first quarter, the price differential between mainland China and France to expand to 47%, prompting more people to overseas shopping. Analyst meeting last month, he revealed that, despite the price differential expansion of local demand in Europe, but at the expense of China’s sales at the expense of.
Barclays Capital analyst Julian Easthope said: “This will continue to be a major feature of the industry this year, unless the enterprise to adjust the price balance to reduce parallel imports.” In the past year, the euro against the U.S. dollar is down 11% to RMB fallen 13%.
Although the European debt crisis persists, the Chinese economy has slowed down, but LVMH product demand continues to grow. Solca of LVMH and its competitors need to place outside of China raised prices 3 percent, which make up about 15 percent of the Chinese mainland customers to the losses caused by the overseas purchase of products. Beier Ji estimates that Asian tourists to buy luxury goods this year will grow by about 15%, while the consumption of local customers will be reduced to less than 10%. High-end product sales increased by 10 percent, only half of the last increase in 2013 to 9%. Jiyue Ni said LVMH has not yet decided how to further adjustment of the price structure. He did not expect the business will be transferred from China to Europe is persistent.
Luxury consulting firm Intercorporate founder of Brandeis Tonkinese (Armando Branchini,) pointed out that if the price is raised the intensity is too large, luxury goods companies may hurt local demand in Europe or other passengers in the local consumption. However, the gradual price increase is necessary austerity measures may be barriers to consumption of the European region. Acting CEO of PPR SA, Fu Lang Alex Palus (Jean-Francois Palus) last month lowered the sales price is not an alternative, and only the Chinese government lowered import duties will be taken into account. China has lowered the tax rate of consumer products, he expected the luxury import tax will eventually reach 10-12%, lower than the current 17%.















