A pullback in spending by wealthy Chinese consumers is increasingly reaching the top end of the luxury market. Hermès and Cartier, long seen as more resilient in mainland China, are now posting steeper sales declines than earlier in the downturn.
Highlights
- Hermès and Cartier sales in mainland China declined by double digits year-on-year in August and September, according to two industry research firms.
- Weaker performance at Hermès International SCA and Cie Financiere Richemont SA's Cartier signals premium luxury brands now face the slowdown previously limited to lower tiers.
- Luxury sector faces a more challenging China market outlook, with potential risks to regional sales and growth if high-income demand weakness persists.
August and September data show sharper declines
As reported by Bloomberg, sales at Hermès and Cartier in mainland China fell by as much as double digits in August and September from a year earlier, citing two research firms that track industry data.The declines mark a notable shift for the two brands. Data from the surveyed firms show Hermès International SCA and Cie Financiere Richemont SA's Cartier had been relatively less affected when a broader slowdown in luxury consumption in China took hold in June.
Pressure spreads across the premium luxury segment
The weaker performance suggests the spending retrenchment is no longer limited to aspirational or mid-tier luxury buyers, but is increasingly affecting some of the sector's most dependable names.For the industry, the trend points to a more difficult operating environment in China, a market that has long been a key growth driver for global luxury groups. If the slowdown persists, brands that had relied on high-income shoppers for stability may face broader pressure on regional sales and growth expectations.
In our earlier report on China’s third-quarter growth outlook and policy support, we noted that a modest pickup was expected but momentum remained constrained by weak consumption and ongoing property-market stress. We also highlighted that authorities rolled out targeted measures such as rate cuts, mortgage subsidies, and the use of unused debt quotas, while exports helped offset soft domestic demand.
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