 "China Flag")
European luxury stocks including LVMH and Gucci owner Kering fell as a wave of Covid infections in China weighed on sentiment — extending a rout that’s wiped about $56 billion from the sector over the past two days.
Shares in Birkin bag maker Hermes International and UK trench coat company Burberry Group also declined, with concerns about China — a key market for luxury companies — adding to worries about a possible economic slowdown in the US.
This week’s slump follows a great year for the sector, with many luxury companies posting stellar results in the latest earnings season.
Luxury stocks have outperformed year-to-date, with share-price gains of more than 30 per cent for Hermes and more than 20 per cent for Richemont, the Swiss jewelry maker that owns the Cartier.
Today’s decline follows a slump on Tuesday after analysts at Morgan Stanley highlighted that companies attending a luxury conference in Paris were “relatively more subdued” about their performance in the US.
Also Read
Meanwhile, Bernard Arnault, the world’s richest person, had $11.2 billion wiped from his fortune in one day over concerns that a softening US economy will dampen demand for luxury goods.
The founder of LVMH — whose offerings include Louis Vuitton , Moet & Chandon, and Christian Dior — had seen his wealth balloon for most of 2023 as share prices of European luxury firms surged.
On Tuesday, he gave back some of those gains. LVMH shares fell 5 per cent in Paris — the most in more than a year — amid a broader decline that erased about $30 billion from the European luxury sector.
Even with the selloff, the French billionaire still has a net worth of $191.6 billion. He’s added $29.5 billion so far this year.
Tuesday’s rout came after a lengthy rally in LVMH’s share price, which is still up 23 per cent for the year. bloomberg
Tuesday’s rout came after a lengthy rally in LVMH’s share price, which is still up 23 per cent for the year. bloomberg
