Ex-LVMH Chair: & # 039; We have a lot of & # 039; Luxury brands out there

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<p class = "leinwand-atom leinwand-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Retailers faced a number of challenges in 2019, where many brands & nbsp;Close shops& nbsp; across the country, in part due to the e-commerce boom and economic uncertainty. "data-reactid =" 16 "> The retail industry faced a number of challenges in 2019, with many brands across the country having to close stores, due in part to the e-commerce boom and economic uncertainty.

However, the global luxury goods market is recovering towards 2020. According to one of the leading luxury goods managers, the sector may not be able to maintain its growth rates – and may need to be further consolidated.

"Except for the very recessive years, luxury and premium brands have grown larger than mass brands each year," Pauline Brown, former LVMH chairman in North America, told Yahoo Finance.

She said this "trend" has continued over the past 20 years and predicts that it will continue, but only to a point. Brown believes the global luxury market's growth rate is unsustainable given global headwinds and other macroeconomic factors.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "LVMH Moet was one of the strong performers of the past year Hennessy Louis Vuitton (LVMUY) and Kering & nbsp;(KER.PA)Gucci heard. The latter's sales rose by over 10% in the reporting period.third quarterwhile Louis Vuitton from LVMH Moet Hennessy & nbsp;reported& nbsp; a 16% increase in sales in the first nine months of 2019. & nbsp; "data-reactid =" 20 "> Last year's strong performers included LVMH Moet Hennessy, Louis Vuitton (LVMUY), and Kering (KER.PA), Gucci. Revenue increased over 10% in the third quarter, while Louis Vuitton LVMH Moet Hennessy's revenue grew 16% in the first nine months of 2019.

Overall, however, Brown believes that one of the biggest hurdles for luxury retailers is that "there are too many brands."

LVMH and Gucci should "continue to do very, very well," said Brown. "But we have a lot of brands out there that just shouldn't be."

<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The effects of the trade war"data-reactid =" 23 ">The effects of the trade war

A woman walks past a Gucci billboard as buyers and anti-government protesters gather at New Town Plaza in Sha Tin, Hong Kong, China on November 3, 2019. REUTERS / Shannon Stapleton

The trade tensions between the United States and its major trading partners continue to overshadow retail and luxury. Brown said China's luxury market was "still healthy" given the Sino-US trade war, but growth had slowed compared to previous years.

Looking ahead to 2020, Brown is most concerned about President Donald Trump's threat to raise additional $ 2.4 billion in French products that would have a direct impact on the U.S. high-end fashion market , The December announcement dropped LVMH and Hermès International shares.

"You know there are problems with the proposed tariffs in some luxury segments," said Brown. "And that's between, most recently between the United States and France, where many of these luxury brands are created."

<p class = "Screen-Atom Screen-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The democracy-friendly protests in Hong Kong also have The city is for 5 % to 10% of estimated $ 285 billion in global luxury goods sales worldwide.according to Bernstein analysts."data-reactid =" 38 "> The protests for democracy in Hong Kong have also raised concerns in the upscale sector, which accounts for between 5% and 10% of the estimated $ 285 billion in annual global luxury goods sales worldwide Bernstein analysts.

Still, Brown doesn't think the protests have affected the luxury market so much. "Even in the prime of life, luxury in Hong Kong was still a very small part of global sales," she told Yahoo Finance.

"Much of the [luxury] Hong Kong buyers are travelers, and those travelers who do not shop in Hong Kong may buy it in Seoul, Tokyo, or Shanghai, ”she added. However, she realized that some brands might be more vulnerable to the wider retail closings.

"I think watch brands are probably the most vulnerable," she said.

<p class = "Screen Atom Screen Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Sales of watches and other luxury goods in Hong Kong fell in August around 48% compared to the same month in 2018, according to & nbsp;Data& nbsp; from the Hong Kong Census and Statistics Department. & nbsp; & nbsp; "data-reactid =" 42 "> Hong Kong watch and other luxury goods sales decreased approximately 48% in August from the Hong Kong Census and Statistics Department compared to the same month in 2018.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Sarah Smith is a Producer / Booker segment at Yahoo Finance. Follow her on Twitter @ sarahasmith"data-reactid =" 44 ">Sarah Smith is a Producer / Booker segment at Yahoo Finance. Follow her on Twitter @ sarahasmith

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