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Main players adapt to slowing sales

By Wang Wen (China Daily)

09:35, April 12, 2013

A Louis Vuitton store in Wuxi, Jiangsu province. The French luxury brand opened its first flagship "Maison" outlet in China on July 21. [Provided to China Daily]

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The period of breakneck growth in demand for luxury brands in China appears to be over, with many of the world's top brands now working hard to consolidate their positions by improving their service to customers.

Bernard Arnault, the CEO of LVMH, the world's largest luxury group by turnover, said it plans to adjust its expansion in China, and that might mean pulling back from some smaller cities.

The head of the company, which owns a portfolio of more than 60 prestigious brands such as Louis Vuitton, said it had found that many people from smaller cities tend to go to bigger cities to shop for luxury items.

Louis Vuitton has expanded rapidly in China, and has more than 40 stores throughout the Chinese mainland, including cities in central and western regions.

Arnault said the brand's development in China will focus on quality, instead of store openings.

And the company is not alone.

In a statement sent to China Daily, Gucci also said it planned to slow its expansion in China this year.

The Italian fashion and leather goods brand - which has developed its store network in China from five in 2004 to 72 by the end of 2012, spread across 34 cities - said it will develop "at a different pace than in past years", although it still plans to continue opening new stores in China this year.

Zhou Ting, director of the Fortune Character Research Center, said that Gucci - one of the highest-profile international luxury brands in China- may even stop opening new stores in the nation.

She added that the Chinese retail sector's slowdown and what has become the saturation of luxury brand names in some places, means a slowdown in openings is almost inevitable.

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