LVMH’s first-quarter results brought reassuring signs that wealthy Chinese shoppers are splashing out on luxury items — just not in China.

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The world’s largest luxury group — with 75 brands ranging from Louis Vuitton to Dom Perignon — said demand from the Chinese rose by 10% in the first quarter, when those shopping outside the country are included. 

A healthy portion of the purchases by Chinese tourists occurred in Japan, where the well-heeled took advantage of the weak yen to buy Louis Vuitton bags and other costly items for less, according to analysts. LVMH sales in Japan surged by almost a third in the quarter, even as revenue in the rest of Asia dropped 6%.

“Hong Kong, Macau and Japan remain favored destinations to shop” among the Chinese, “with Japan luxury spend boosted by attraction of yen weakness,” said Bloomberg Intelligence luxury goods analyst Deborah Aitken.

She reckons Chinese shoppers made up about 23% of luxury goods spending globally heading into this year, versus 33% prior to the pandemic. That will probably improve more into 2025, backed by low double-digit growth, against a luxury market expanding by 5-6% this year, she said.

The yen is trading at 34-year lows against the dollar.

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Ever since pandemic lockdowns ended, the luxury industry has been anticipating a surge in demand from Chinese consumers as they rushed back to stores. That hasn’t materialized as economic uncertainty at home weighed on sentiment. 

Signs that the situation may be improving, or at least not deteriorating further, helped lift LVMH shares by almost 5% on Wednesday, and gave a more modest boost to luxury rivals Hermes International and Cartier-owner Richemont as well. 

Kering SA, which last month warned that sales at its biggest brand, Gucci, likely dropped by about 20% in the first three months of this year on China weakness, was little changed.