Luxury Stocks: Can Brands Grow in China by Focusing on Women?

James Dennin, Kapitall: Luxury stocks for men have been hammered in the Chinese market. Do women's luxury brands have room to grow?

A lot has been written about the dangers of investing in China. Investors who know that China's growth is bound to slow down have been looking to move their money into more predictable areas like bonds or equity markets in the US and Europe.

In particular, the market for luxury goods in China has contracted significantly. Affluent officials giving each other expensive gifts was a major source of luxury spending in China, whose consumers represented almost 30% of luxury spending worldwide. The slowdown in luxury spending may be attributable to a government crackdown on gift-giving and corruption, altering big-ticket spending patterns.

Read more: Eye of the Beholder: Would You Invest in These Profitable Beauty Stocks?

However, there is still relatively robust growth to be had in other areas of China's luxury sector, particularly with regards to women. China's upper classes are among the most educated consumers in the world, and are the most likely to wait until traveling abroad to make luxury purchases. 

The management consulting firm Bain and Co. still sees huge growth in the market for luxury goods aimed women.

While the market in China for high-end watches and mens apparel has shrunk as state officials play it safe, the purchasing power for female consumers could continue to grow. Bain projects that the luxury market for women's apparel and cosmetics could see another 10% upside in 2014. 

We built a list of some of the luxury goods manufacturers with leverage in the Chinese market who generate most of their revenues on goods that are targeted toward women. 

Click on the interactive charts below to view data over time. 

Do you see investing opportunities in women's apparel and cosmetics? Use the list below to begin your analysis. 

1.Estee Lauder Companies Inc. ( EL):Engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products worldwide. Market cap at $25.73B, most recent closing price at $66.50.
 

 

2.Michael Kors Holdings Ltd. ( KORS):Engages in the design, marketing, distribution, and retailing of branded women's apparel and accessories, and men's apparel. Market cap at $19.27B, most recent closing price at $94.22.
 

 

3.Elizabeth Arden, Inc. ( RDEN):Engages in manufacture, distribution, marketing, and sale of fragrances, skin care, and cosmetic products to retailers and other outlets in the United States and internationally. Market cap at $764.05M, most recent closing price at $25.92.
 

 

4.Coach, Inc. ( COH ):Engages in the design and marketing of accessories and gifts for men and women in the United States and internationally. Market cap at $13.15B, most recent closing price at $47.56.

 

 

5.Vera Bradley, Inc. ( VRA):Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley' brand. Market cap at $965.61M, most recent closing price at $24.40.

 

 

( List compiled by James Dennin, a Kapitall Writer. Monthly returns sourced from Zacks Investment Research, all other data sourced from Finivz.)

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