Nomura: Luxury sales weaken at Zhengzhou David City as jewelry and fashion brands diverge

Why did mall sales slow after the first quarter?

Nomura interviewed an expert familiar with high-end consumption in China on 4 November. The expert said Zhengzhou Dennis David City performed solidly in the first quarter of 2026, after which sales momentum weakened, particularly in the luxury segment.
The expert attributed the weakness to two factors: some wealthy business owners shifted their spending overseas, diverting customer traffic; wealthy consumers who continued to shop domestically reduced both their purchase frequency and total spending. In the fourth quarter, sales momentum weakened further across the board, partly because of mall renovations.
The expert expects weak consumer sentiment to persist through 2027. The mall will strengthen services for high-value customers to increase loyalty, while introducing categories favored by younger consumers, such as fresh food and snacks.

The expert observed that wealthy consumers' preferences are shifting from fashion to gold and jewelry, but jewelry brands have not performed uniformly.
Van Cleef & Arpels' same-store sales rose more than 30% year on year in the first nine months of 2026, with growth accelerating in October. The expert believes mall customers recognize the brand and value its products' suitability for everyday wear.
Cartier's same-store sales fell by a percentage in the teens year on year in the first nine months, affected by store renovations, but rose approximately 20% year on year in October; Bulgari and Tiffany & Co. continued to see weak sales during the year.
The expert said Lao Pu Gold's sales have trended downward since the second quarter amid fluctuations in gold prices. At the same time, customers' perception of the brand and its positioning has improved, and they increasingly regard it as a luxury brand.

The expert observed that most international luxury fashion brands, including Hermès and Louis Vuitton, saw weak sales during the year. Chanel and Dior, however, recorded positive same-store sales growth in the first nine months, driven mainly by new products introduced by new designers and events for high-value customers.
High-end outdoor brands continued to grow overall, though at different paces: Arc'teryx's same-store sales growth gradually weakened in the first nine months of 2026, while Salomon maintained a relatively stable growth trend.