Shares of Hermès International fell by as much as 5.5%, shares of LVMH Moët Hennessy Louis Vuitton ES dropped about 4%, and shares of Gucci owner Kering SA fell more than 2%.
of luxury industry experienced a setback lose more than $30 billion It will arrive in this sector sometime this Tuesday.
in particular, Hermès International fell 5.5%. in the meantime Moët Hennessy Louis Vuitton (LVMH) about 4% smaller, Kering SA, owner of Gucci more than 2%.
Despite economic ups and downs this year, the sector has maintained its dominant position in European stock markets.
But his confidence is wavering. Luxury department organized by Morgan Stanley in Paris They said U.S. earnings were “relatively subdued,” according to investment bank analyst Edouard Auban. This reflects the “weakness of particularly aspiring consumers.”
Morgan Stanley said that was offset by stronger demand elsewhere.
“Overall, we found that feedback from businesses was resilient, indicating a soft landing in the US, but largely offset by strong performances in other markets.”
Both the US and Asia are important markets for European luxury companies The latter (excluding Japan) accounted for 30% of LVMH’s sales last year, while the US accounted for 27%.
Deutsche Bank said investors were likely to be more selective going forward, although concerns about a slowdown in the U.S. economy are growing and demand from China is boosting sales.
In view of the above LVMH rose 25% and Hermès 34%. both outperforming the Stoxx Europe 600 Index (10%).
“The luxury sector remains crowded with long positions for many investors, and market premiums in the sector are at historically high levels,” Deutsche Bank analyst Matt Garland said in a note.
Thanks to this rise Louis Vuitton raised its market valuation to more than $500 billion last month becoming the first European company to reach this milestone.
Investors have bet that Chinese shoppers coming out of one of the world’s toughest lockdowns will spend more aggressively, and those gains were offset by a broader economic slowdown.
Last month, LVMH’s stock hit a record high as it reported higher sales, while Hermès’ quarterly sales surged as Chinese consumers bought up expensive scarves and Kelly bags.
However, there are some warning signs: LVMH pointed to slowing U.S. growth, and British fashion brand Burberry Group said demand for sneakers and other essentials among U.S. youth was declining.