Luxury Stocks Tumble $32.3 Billion In The European Sector Amid Fears Of Soft U.S. Sales

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High-flying luxury stocks came crashing to earth Tuesday, as spooked investors offloaded bling baggage amid fears of the impact of a softening U.S. economy on sales.

In particular, Burberry CEO Jonathan Akeroyd said that there has been a drop-off in the purchase of entry level accessories among aspirational younger U.S. consumers, who collectively pulled in their bling-less belts.That’s a major concern as, with Chinese regions previously under some of the globe’s toughest and extended lockdowns and ravel restrictions, the U.S.

The major houses have expanded in the U.S., opening stores beyond the traditional luxury hubs of New York and Los Angeles, and LVMH especially could be exposed, as it generated 23% of its sales from the U.S. in its first quarter . With the U.S. market cooling, Chinese spending has so far focused on domestic locations, or popular nearby destinations such as Macau and Hong Kong. A backlog in processing visas and passports, plus growing enthusiasm for domestic and regional tourism, means travel analysts don’t believe international Chinese shoppers will be back in force until 2024.

Investors have previously bet on a bounce-back by Chinese consumers. Last month, LVMH’s shares hit a record after it reported a surge in sales, while Hermes joined Europe’sBut for luxury stocks, if there is no Chinese ying to the U.S. yang, then this week's share price falls may not stop here after a prolonged rally that seemed impervious to the cost of living squeeze, the pandemic, inflation or political instability.

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European shares slip as macro gloom weighs; luxury stocks reboundEuropean stocks slipped on Thursday as concerns over the U.S. debt ceiling standoff and a global economic slowdown resurfaced and outweighed initial optimism from upbeat corporate earnings, while luxury stocks stabilized after a bruising selloff.
Fonte: Reuters - 🏆 2. / 97 Consulte Mais informação »