Western luxury brand firms didn’t think China’s anti-corruption crackdown would last. And increasingly, it’s looking like they’re right. Case in point: Sales of jewelry, watches and “valuable gifts”—that’s the official rubric from Hong Kong’s Census & Statistics Department—exploded in Hong Kong in April. They jumped 68% compared to April 2012. (Hong Kong is a top destination for mainland Chinese to do their shopping, thanks to its lack of sales tax.)
Observers are linking the surge to the recent collapse of gold prices, which has drawn in buyers looking for a bargain. This is good news for firms that supply the shiny stuff to China, as well as the Chinese officials who eventually receive a significant share of such these baubles as “gifts.” Cartier-owner Richemont, Bulgari-owner LVMH and Swatch, which owns Breguet, all stand to catch a bit of a tailwind if China regains its luxury appetite.