Burberry sales jump in China amid tech wealth

British luxury label Burberry and Swiss group Richemont have reported significant sales growth in Greater China for the first quarter of fiscal 2027, signaling a potential recovery in the world's largest luxury market. The uptick is largely attributed to a surge in wealth within the technology sector and strong demand from Gen Z consumers, despite broader economic headwinds. This trend is critical for the luxury goods sector as brands look to stabilize global revenues through a rebound in Chinese consumer sentiment.

Burberry reported a 5 percent year-on-year increase in sales to £455 million (US$606 million) for the quarter ending June 27, 2026. This growth was notably driven by a 9 percent rise in Greater China, matching the previous quarter's performance. The London-listed brand highlighted that local demand and outsize growth from Gen Z consumers were primary factors. Conversely, Burberry’s sales in Japan fell by 2 percent, a decline attributed to a decrease in inbound tourism from China.

Richemont, the parent company of prestigious jewelry houses Cartier and Van Cleef & Arpels, also saw robust performance with Asia-Pacific sales jumping 21 percent in its latest quarter. The Swiss-listed group achieved double-digit growth across mainland China, Hong Kong, and Macau, particularly within its jewelry division. Analysts like Jelena Sokolova from Morningstar suggest that while these are positive signs, the recovery is still in its early stages and remains well below pre-pandemic peaks.

The luxury sector's momentum in China is being fueled by a strong asset market, specifically a 50 percent surge in China’s Star Market during the first half of the year due to the global artificial intelligence boom. This has created significant wealth and high-wage jobs in the tech sector, offsetting concerns regarding youth unemployment and the property market. Looking ahead, a report from Bain & Company predicts modest growth for China's personal luxury market through 2026, supported by a growing middle class and policies aimed at repatriating luxury spending to the mainland.