Luxury giants bank on Chinese return as Western shoppers sober up

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PARIS : The focus of the luxury industry is shifting back to China, with hopes that its high-end spenders will once again splurge on designer goods during Lunar New Year festivities as Beijing relaxes COVID curbs after three long years.

Quarterly results from LVMH and Europe's other luxury goods companies will offer glimpses of the toll of last year's COVID-related disruptions in China, even as the companies roll out pricey new collections tied to the Year of the Rabbit.

They are expected to see a deceleration in sales growth over the quarter as the post-pandemic splurge on designer fashions begins to ease in the United States and Europe.

Consensus estimates cited by UBS are for fourth quarter sales growth of 7 per cent at LVMH, which releases full-year results on Thursday, and for a sales decline of 2 per cent at Kering, which reports results on Feb. 15. Hermes, which reports fourth-quarter results on Feb. 17, is expected to show sales growth of 17 per cent, a decline from 24 per cent in the third quarter.