Luxury Brand Ownership On Rise in Asia

As a result of a weakening dollar and a stronger yuan, luxury brand distributors in China are buying out their American and European partners. From the Financial Times:

High-profile luxury brands from Europe and the US have for years relied on little-known companies such as DKSH, Fairton, Xinyu Hengdeli and Peace Mark to get their products into the hands of Asian consumers.

Now these distributors are seeking to move up the value chain by acquiring brands themselves, rather than just distribution rights. They aim to capture a bigger slice of the rapidly expanding Asian luxury market at a time when the economic downturn is expected to hit the sector’s sales in Europe and the US. sales in Asia excluding Japan are ex­pected to grow by about 20 per cent this year, compared with a growth rate of 4-5 per cent for Europe and the US, according to Thomas Chauvet, a Citigroup analyst.

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