Luxury goods firms feel pinch of austerity push

Two of the world's leading luxury goods makers have reported toughening market conditions in China, which they blamed on the government's ongoing austerity measures and changing consumer habits.

The world's largest luxury group LVMH Moet Hennessy Louis Vuitton SA said it had seen a significant slowdown for its goods across Asia in the third quarter of the year, and in China demand for its handbags and cognac, particularly, had slowed.

However, the company said sales in Europe and the United States had improved as it reported group revenue for the latest quarter rose 5.7 percent to 7.4 billion euros ($9.4 billion).