Group 1 - The New Year's holiday marked the first long holiday after the Hainan Free Trade Port's closure, with strong performance in duty-free sales in Sanya and Haikou, showing significant year-on-year growth in sales volume, shopping visitors, and shopping amount [2][4] - From January 1 to 3, 2026, the customs supervised the sale of 442,000 duty-free items, a 52.4% increase year-on-year, with a total shopping amount of 712 million yuan, up 128.9% [2] - The new duty-free policy expanded the eligible consumers to departing travelers and increased the number of product categories to 47, contributing to a new growth point in duty-free shopping [4][5] Group 2 - The new policy removed the limit on the number of purchases for island residents, allowing them to buy 15 types of "immediate purchase and pick-up" items without restrictions throughout the year, which stimulated local shopping enthusiasm [5] - Major beauty brands like L'Oréal and Estée Lauder reported improvements in their travel retail markets, with L'Oréal's Northeast Asia sales growing by 4.7% year-on-year in Q3 2025 [5] - The performance of duty-free shopping during the New Year aligns with the recovery trend in the luxury goods market, as major luxury brands like LVMH and Hermès reported positive growth in their recent financial results [6] Group 3 - LVMH has initiated store closures in China for several brands, including Louis Vuitton and Tiffany & Co., while focusing on high-end urban areas and flagship stores [6][9] - The number of new luxury brand store openings decreased by 38% in the first half of 2025, indicating a strategic shift towards first-tier cities and enhancing the competitiveness of high-end shopping and duty-free markets [9] - A recent report by Bain & Company predicts that the global luxury goods market will see a slight decline in 2025 but is expected to return to growth in 2026, with a projected annual growth rate of 4% to 6% over the next decade [12]

Core Viewpoint - Kering Group has agreed to sell its beauty business to L'Oréal for €4 billion (approximately $4.66 billion) as part of a strategic move by new CEO Luca de Meo to address high debt levels and refocus on core fashion operations [1][2] Group 1: Transaction Details - The agreement allows L'Oréal to acquire Kering's perfume brand Creed and grants a 50-year exclusive license to develop beauty products based on Kering's fashion brands, including Gucci, Balenciaga, and Saint Laurent [1] - The sale is a significant step for Kering to reduce its net debt, which stood at €9.5 billion as of June 30, alongside €6 billion in long-term lease liabilities [1] Group 2: Business Performance - Kering's beauty business, established in 2023, recorded an operating loss of €60 million in the first half of the year, highlighting the challenges faced in diversifying away from Gucci [2] - Gucci's revenue fell by 25% year-on-year in the last fiscal quarter, increasing Kering's pressure to deleverage and avoid further credit rating downgrades [2] Group 3: Strategic Implications - The transaction marks a shift in strategy under CEO de Meo, who took over in September and has committed to rationalizing the business and restructuring if necessary to lower debt levels [2] - L'Oréal's acquisition is its largest to date, surpassing the $2.5 billion purchase of Australian brand Aesop in 2023, indicating L'Oréal's aggressive expansion strategy [2]