China Growth Cools for Gucci parent company PPR

  PARIS-In China, it seems that more luxury wallets snapped shut.

PPR SA, PP.FR 0.54% of the parent company of Gucci, is the latest luxury goods conglomerate, to report the most dramatic slowdown in market growth in the industry. China increased sales of Gucci "high single digits" in the first quarter, PPR Chief Financial Officer Jean-Marc Duplaix, said Thursday during a conference call.

In China, where sales of high-end products for years scorching - While in some countries this kind of growth would gain acclaim it a bit disappointing ..

The gloomy picture across the entire portfolio of designer PPR, which also stretched to brands such as Yves Saint Laurent, Bottega Veneta and Brioni. The news comes on the heels of a plate-China growth for LVMH Moet Hennessy Louis Vuitton SA, MC.FR +1.29% for the industry leader. In addition, Hermes International, RMS.FR +1.21% of the manufacturer of some of the most expensive handbags in the industry, said earlier this week that the growth cooled in Asia last year.

"In China, there is less enthusiasm for buying luxury goods, perhaps because of concern about the economic and political environment," said Mr. Duplaix. "We are still waiting for a recovery in consumption in China. Perhaps it will be in the second half."

Last week LVMH attributed the stagnation in the Chinese luxury slower economic growth. With the arrival of the new Chinese government, there was a crackdown on gifts, a practice that had increased sales of watches and other expensive items.

It is a serious slowdown in the go-go days when the sales growth in China was easily in the double digits, 20%, 30% or even 40% for some luxury goods companies every quarter. The first signs of weakness appeared last year, while sales in the U.S. grew faster than China for companies such as LVMH.

PPR, which is to rename itself Kering in June, the total revenue in the first quarter by 1% to € 2.36 billion ($ 3.07 billion), stripping spun off a number of companies that sold or. PPR also has more public and Puma, whose sales decreased consumer brands in the first quarter.

At the same time, weighed the difficult financial and economic climate in Europe to local buyers. Mr. Duplaix says Gucci by a slowdown in the local consumers and tourists house were affected. He added that he was "cautious" about the ability of the company to be supplied with strong growth in North America for another year, after the booming business in the past year.

Industry players hope that the Chinese slowdown will be short-lived, and 0.45% BRBY.LN Burberry PLC could be their beacon. Asia was the strongest performing region trench coat manufacturer in the six months to end-March, up 15% on the back of robust sales in China - just six months after the slowdown in sales in China have led to the enterprise to issue a profit warning.