Luxury stocks tumbled in Europe Wednesday after a profit warning from the owner of Gucci laid bare a sharp slowdown in demand for high-end goods, especially in China. Shares of Kering plunged as much as 15% in Paris, while LVMH, Europe’s second-most valuable company and owner of brands such as Louis Vuitton and Tiffany & Co., was more than 3% lower at one point. Switzerland’s Richemont, which makes Piaget watches, Montblanc pens and Van Cleef & Arpels jewelry, slipped 3%.
“The magnitude of the warning is jarring and is raising further concerns about the state of high-end consumer demand,” Adam Crisafulli, a former JPMorgan analyst and founder of market intelligence firm Vital Knowledge told CNN. “Gucci has been encountering some company-specific problems for a few quarters, but this update will raise further worries about the state of consumer spending and China’s economy,” he added.