Luxury goods giant LVMH closed three boutiques in China including its first store in Guangzhou, and is expected to shut several more across the country over the next couple of months according to industry experts. This news is another major blow to the Chinese luxury market as leading luxury groups continue to lose market share in this high-growth country that has been hit by a slow economy and an ongoing anti-corruption campaign supported by the political regime. The anti-corruption campaign was launched by President Xi Jinping in 2012 with the objective of stifling the demand for all types of luxury goods that were popular in China as bribes and gifts for government officials.
Rumors are rife that LVMH will close more than 20% of its stores in China as they are finding it hard to break even. LVMH executives acknowledged that overall sales of their products in Asia, fell by more than 9 per cent in Q3 2015 with sales in China “going down”. LVMH has fallen out of favor among China’s discerning customers who see the brand as a mass product and expensive at that.