Forget the China gloom — luxury bosses say shoppers are back

Core Insights - Chinese luxury market is showing signs of stabilization after a period of weakness, with executives from major brands expressing cautious optimism about demand recovery [1][3][15] Company Performance - Prada's CFO noted a stabilization in demand, suggesting a more normalized market may emerge by 2026 [3] - Coach reported a 20% growth in its China business, indicating strong momentum and effective positioning to attract cautious consumers [5][6] - Burberry's Greater China sales increased by 3% last quarter, surpassing expectations, while Richemont experienced a significant improvement from earlier declines [7] - LVMH reported a 1% growth in the third quarter, marking its first quarterly increase this year, with positive signs from mainland China [8] Market Trends - The luxury sector in China has been affected by high youth unemployment, a prolonged property downturn, and weaker household confidence, impacting discretionary spending [2] - Analysts caution against assuming a full rebound, noting that improvements may be due to easier comparison bases rather than a broad-based recovery [10][11] - Global brands are increasingly localizing their strategies in response to intensified competition from Chinese labels, with some dedicating over 40% of revenue to China-focused marketing [11] Consumer Behavior - The rise of social media platforms like Xiaohongshu and Douyin is prompting companies to rethink their content and product strategies [12] - EssilorLuxottica reported broad-based growth across regions, indicating that consumers are not trading down but are attracted to product innovation [13]