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Bernard Arnault, chairman and CEO of LVMH (LVMHF), has arrived in China for his first visit to the country since the end of its strict Covid restrictions, after his company posted a jump in sales driven by a rapid rebound in Chinese spending on luxury goods.
The French billionaire is the latest in a string of prominent business leaders to have visited China, following trips by Tesla (TSLA) CEO Elon Musk and JP Morgan (JPM) CEO Jamie Dimon last month. Beijing has been wooing global CEOs in an effort to arrest a slump in business confidence and to divide Western businesses from governments on their policy toward China.
Arnault, who has recently been surpassed by Musk as the richest person in the world, was spotted at several shopping malls in downtown Beijing on Tuesday, according to state media reports, citing photos on Chinese social media.
Privately-owned business magazine Caijing said the French entrepreneur inspected several brand stores owned by LVMH, including Christian Dior and Bulgari, in the WF Central and SKP malls, citing photos taken by local residents.
LVMH didn’t immediately respond to a CNN request for comment.
LVMH reported its first-quarter sales surged 17% from a year ago, beating analyst expectations, driven by a rebound in China’s luxury market from the decline it experienced during the pandemic.
The company had registered “some pretty nice pick up in China, which bodes well for the rest of the year,” its chief financial officer Jean-Jacques Guiony told analysts during a quarterly sales call in April.
Consumers were returning to the company’s stores, and online sales were picking up, he said.
“We definitely see a normalization of this market… We are extremely hopeful and should benefit from a strong push from mainland China in 2023.”
Beijing called an end to its stringent and often oppresive zero-Covid policy in December, which resulted in an initial burst in consumer activity following three years of rolling lockdowns. Luxury goods spending bounced back more quickly than any other sector in the first quarter.
Although the economic momentum has lost steam in the past couple of months, growth in luxury goods sales has accelerated.
According to government statistics released this month, retail sales of jewelry, gold and silver surged 19.5% in the first five months of 2023 from a year ago, the biggest jump among all categories for goods.
China was one of the world’s largest luxury goods markets before Covid hit. Bain & Co. estimated earlier this year that Chinese consumer spending accounted for around 17% of the global luxury market in 2022. That represented a decrease from 35% in 2019.