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Lower spending from Russian tourists takes toll on luxury industry

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The fact that the most influential brands in this environment – such as Hermès, LVMH or even the Kering Group – are already suffering the effects of this decline leads to the conclusion that luxury retailers depend heavily on foreign tourist purchases.

Chinese tourists, however, may offer a lifeline to these companies to offset their negative results. Travellers from the Far Eastern country accounted for 49.4 per cent of the purchases of luxury goods in December 2014, as opposed to only 33.7 per cent in January of the same year.

For their part, tourists of all nationalities spent 4.3 per cent more on luxury over the whole of 2014. In Europe, purchases by international visitors account for 50 per cent of the luxury sector sales, falling only by 1.5 per cent in recent months. Meanwhile, purchases increased by 44 per cent in the rest of the world.

So, why are Russian tourists spending less?

According to Global Blue, spending by Russian tourists has fallen by 51.2 per cent in January 2015, a small drop following a much sharper decline in December that saw spending plummet by 44 percent.

While Russian tourists remain one of the main targets of the luxury sector – representing no less than five to seven per cent of the global luxury market – the fall of the rouble, coupled with the situation in Ukraine and the subsequent Western sanctions, have taken their toll on Russian tourists’ appetite for spending while abroad,

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