Luxury retailers in China are suffering amid an anti-corruption drive and uncertain economic outlook and they're unlikely to recover anytime soon, analysts say.
"The anti-corruption crackdown in China is having a significant impact on luxury retail sales, from fashion garments, to shoes and watches," said Charles Yan, head of greater China Consumer Research at Standard Chartered Bank in Hong Kong. "We don't think it will recover quickly – at least not this year or next year."
A slowing Chinese economy and an official crackdown on corruption and lavish gift giving that started in 2012 have cooled the luxury market after years of double-digit growth.
Sales of luxury goods in China rose just 2 percent in 2013 from the previous year, according to the consultancy Bain & Co. That's down from 7 percent growth in 2012 and 30 percent in 2011.
"The global growth for luxury sales is likely to be in the low single digits this year and in China I expect negative growth," said Yan.
Prada, famous for its luxury handbags, said this month that first quarter of 2014 profits fell almost 24 percent compared with the same period last year on flat sales in China.
The Asia-Pacific is the Hong-Kong listed firm's biggest market and soft spending by Chinese consumers has helped push its shares down 18 percent so far this year.
It's not the only luxury retailer feeling the sting.
"The world's largest listed jewelry chain, Chow Tai Fook Jewelry Group, expects sales to slow down this fiscal year, amid the ongoing austerity drive and economic uncertainties in China," Ryan Huang, a market strategist at IG, said in a note.