Luxury brands feel the pain as China’s growth slows

Analysts and executives warn that the ongoing decline in luxury spending in China is unlikely to be reversed this year, deepening a decline that has already wiped nearly $200 billion off the sector’s value in recent months.

Profit warnings from Burberry and Hugo Boss and a 27% drop in quarterly sales in China, Macau and Hong Kong from Richemont this week have added to concerns about weakness in China, where middle-class consumers have cut back on spending on big-ticket items.

According to consultancy Bain, China accounted for 16% of the €362 billion ($393.8 billion) of global luxury spending last year.