“Recent seasonal clearance activities show that retailers either have excessive inventories on hand or foreseeable consumption is no longer on the level that was planned,” said Brenda Wang, founder of Brandxcel, a Hong Kong-based consultancy firm that advises luxury brands on operating in Asia.
“At this stage, if you have very seasonal products, you have to take a view on whether you should cut your losses.”
Executives, however, refuse to draw conclusions about a slowdown that only recently started to dent earnings in the past quarter.
“We are now down about five percentage points on our targets, but those were for 20 per cent revenue growth,” said the Asian head of a leading French group.
“Relying more on sales isn't a sign of panic. It's about meeting our budget for this year and then making any readjustment after that.”
However, some privately acknowledge that they have been caught flat- footed by the slowdown in mature markets such as Hong Kong, Japan and Singapore, which recently entered recession.
South Korea and India are also suffering because falling currencies are adding to the decline in purchasing power.
In Japan, department store sales have slumped, with art, expensive jewellery and watches hard hit, according to the Japan Department Stores Association, which said sales were down 13.5 per cent in October in that category.
However, luxury groups have cut prices to reflect the yen's rise, lifting hopes of higher consumer spending over the Christmas shopping season, according to a representative of Mitsu- koshi, a high-end department store.
