The Chinese appetite for luxury Ebbs

China's insatiable appetite for luxury goods is growing rich as a buyer succumb to nervousness about the slowing economy and ease the government suppressed the corruption that often in the form of expensive gifts. The sales to everything from handbags to watches gold leather are down, even if they are still robust by world standards. However, the slowdown is a blow to the luxury brand in the business world, which once protected the Chinese market from the economic malaise that affects their operations in Europe and the U.S. In the latest sign that the red-hot sales cooling, the actions of the Chow Tai Fook Jewellery Group Ltd 1929.HK -2.54% of the world's largest retailer by sales fell, from 8.7% in trading in Hong Kong reported on Wednesday, Thursday after that its sales increased by 16% in the three months ending in June By comparison, the annual income growth was 61% for 12 months to March. Almost all of the company has more than 1,500 stores in Greater China, including China, Hong Kong and Macao. "Rich people from Hong Kong and China are buying less because of the weak economic outlook," said Kent Wong, General Manager of Chow Tai Fook Group in Hong Kong. He added that the sales are the most expensive item for more than one million Hong Kong dollars, or at least U.S. $ 130,000, fell sharply as madness poorer. On Wednesday, shares fell to the British fashion brand Burberry Group PLC BRBY.LN 6.13% after the company reported that revenue growth will be followed dominates its Asia-Pacific, China, fell to 16% in the first quarter of 67% a year earlier. In recent years, China is an important market for luxury companies. It has $ 2.7 million high net worth individuals with assets of more than six million yuan, or about $ 1 million and 63 500 persons in excess of 100 million yuan, or about $ 15 million, according to Shanghai-based Hurun Wealth Report market research company. The desire for luxury has increased beyond the elites who are consumers of the middle class and lower class, making China the main engine of growth of luxury. For Italian luxury company Prada SpA, are -0.32% 1913.HK 24% of its global sales from China, compared to 13% in North America. The Chinese economy is driven at the slowest rate since the global financial crisis, due to falling exports to Europe and over a long effort by the government to grow to lower property prices. "This is an alarm clock that all of Europe, the United States and China-related," said Luca Solca, director of research at brokerage CA Cheuvreux. "Many people lose the mood to buy up to luxury," he said. Current crackdown on corruption, and investigations of the assets of the government official can be added to the crisis, according to analysts at brokerage CLSA Asia-Pacific Markets. About 16% of consumers, the luxury goods bought in the 12 months before they were Junesaid gifts for business contacts, according to data from CLSA. This week, the Chinese government prohibits officials from using public funds to buy luxury goods, according to state news agency Xinhua. The sale of jewelry and watches, which were often combined gifts in China between officials and businessmen, hard, especially in Hong Kong, made a haven for wealthy Chinese consumers. According to Liu Silvia, economist at UBS, the volume of transactions and jewelry shows in Hong Kong fell by 3% in May compared to last year, while the value of goods sold rose only by 3%. "The numbers are small," she predicted. "The big spenders have disappeared," said Joseph Chu, Executive Director, Hong Kong Jewellery and Watch a merchant prince. A year ago, spending more than 20 tourists a month from China more than HK $ 1 million on a watch list as one of the 16 stores in Princeville. But these days, he said the number was reduced to three or four a month. Jewelery sales in China slowed in the first quarter, with increases of 20% compared to 59% the year before, according to data from CLSA and the Chinese National Bureau of Statistics. Nevertheless, China remains the fastest growing global market for luxury goods and should Japan and the United States to overtake, the largest luxury market in 2015, according to Boston Consulting Group. Aaron Fischer, an analyst with CLSA in Hong Kong is based, said that the revenue was slowdown after an exceptionally good year was expected in the luxury sales in China last year. Companies like Louis Vuitton and Gucci Group sales by the rapid expansion of branches across China. But not the pace of new openings for these brands is sustainable, said Mr Fischer. Latecomer to China are still to be seen strong sales growth. Prada, which began its expansion in the country after last year lists, reported in June that sales in the Asia-Pacific ex-Japan, the largest market jumped 47% in the first quarter. Meanwhile, other companies continue to be aggressive without the expansion plans. Chow Tai Fook, he said to his plan of opening 600 stores over the next three years, sticking mainly in small towns. Halewinner Group, a luxury retailer based in Hong Kong shows the sale Audemars Piguet and Omega, among other brands, will open its sixth store Friday in Xiamen, a city of almost four million in Fujian Province, and is on his way to 10 stores in open less than a year. "There will be more rich people there," said Karson Choi, president of the company.