Reckitt Benckiser, which makes Nurofen tablets, cold remedy Lemsip and Durex, saw a pick-up in China after a decline in volumes because of lockdowns. "I have no doubt that the intimate wellness (business) in China is going to perform well," said interim chief executive Nicandro Durante, referring to the division which includes KY Jelly and Durex condoms. The upbeat comments echo those of many executives during the fourth-quarter earnings season, particularly from luxury labels which are banking on a strong rebound fuelled by Chinese shoppers drawing on savings built up during pandemic lockdowns. Resilient sales in China would be a relief for companies struggling with higher energy and wage costs, particularly in Europe, at the same time as rising prices of food, energy and rents are forcing consumers to be pickier about what they buy. Stronger signs that Chinese factories are rebounding after COVID restrictions were lifted late last year could also temper an expected downturn in the global economy, as the U.S. Federal Reserve stays on its higher-for-longer interest rate path.
PUFFER JACKETS
The data brought relief to investors and buoyed global
equities. The pan-European STOXX 600 was up 0.3% at 1109 GMT,
adding to its more than 8% rise since the start of the year and
regaining some of the ground lost last year when the region was
convulsed by the Ukraine war and the energy crisis it triggered.
Shares in Moncler rose more than 5%, putting it among the
best performers on the index, after the Italian luxury group,
known for its warm puffer jackets, said it had seen a strong
start to the year.
Chief marketing and operating officer Roberto Eggs told a
call with analysts on Tuesday evening that the company saw
double-digit sales growth in China before and after the Lunar
New Year holiday in January.
"We always look at the results two weeks before and one week
after the Chinese New Year and the impact is really positive,"
he said.
Adding to growing confidence in the luxury sector, the
company said it had seen no adverse effects on demand from a 10%
price increase at the start of the winter season.
Reuters reported in February LVMH's top fashion
brand Louis Vuitton was expected to increase prices in China by
as much as 20%.
(Reporting by Christoph Steitz in Frankfurt and Jan Schwartz in
Hamburg, Elisa Anzolin in Milan and Richa Naidu in London;
Writing by Josephine Mason in London; Editing by Catherine
Evans)
