Source: Business Times, LVMH, Hermès, Tiffany & Co., Savills Research, Vogue Business, Internet
“For a number of years, Asia-Pacific has provided luxury brands with a key contribution to their global business,” says Anthony Selwyn, Head of Savills Prime Global Retail Team. “Now, the region is experiencing a positive recovery to Covid-19, stimulating further aggressive expansion and investment.”
In the historic years, luxury goods retail sales in the Asia-Pacific region grew significantly, driven by growing sales in emerging luxury markets., Bain expects Chinese local spend to account for up to 28% of global luxury consumption by 2025, up from 11% in 2019, this year from January to October 2020, APAC won 38.9% of global luxury store openings, it's the biggest share compared to other regions, although with the impact of the Covid-19 pandemic. Especially, China has a 64.7% growth in luxury store openings compared with 2019, the only major market which reported positive growth over this year.
“China is absolutely taking a priority,” says Andrew Maag, CEO of luxury menswear label Dunhill, adding that the brand does not plan to open stores in America and Europe in the near future.
Tiffany & Co. (NYSE: TIF) recently reported its financial results for third quarter 2020. In the third quarter, worldwide net sales returned to the billion dollar level and represented a decrease of 1% as compared to the prior year; on a constant-exchange-rate basis, which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see “Non-GAAP Measures”), worldwide net sales for the three months were 2% below the prior year.
In Asia-Pacific, total sales grew by 30% in the third quarter and decreased 7% in the year-to-date to $382 million and $854 million, respectively, which included comparable sales increases of 40% in the third quarter and 3% in the year-to-date. In the third quarter, total sales results reflected strong retail sales growth in Mainland China and Korea, partially offset by mixed performance across other markets in the region. In the year-to-date, total sales reflected strong e-commerce sales growth, as well as retail sales growth in Mainland China and Korea, which was more than offset by softness across the other markets in the region, which management attributed to the effects of COVID-19.
Alessandro Bogliolo, Chief Executive Officer, said, “We had a strong third quarter both in sales on a relative basis and terrific results in profitability on an absolute basis, which speaks volumes about the enduring strength of the Tiffany brand and gives us confidence as we enter the important holiday season. I want to commend all our invaluable managers and extraordinary employees for the excellent results achieved in a very, very difficult environment.