The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — Shares in top European luxury goods companies fell on Monday after weak economic data from China, which is a major source of revenue for many firms in the sector.
LVMH fell 2 percent, while Hermès and Kering and fell by more than 1 percent.
Italian luxury goods companies also lost ground, with Ferragamo falling 1 percent, while Moncler retreated by 2 percent.
Prada shares also slumped around 5 percent in Hong Kong, although Burberry shares managed to swim against the tide by rising 1 percent after Bank of America Merrill Lynch upgraded its stock rating on the company to "neutral."
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Data on Monday showed China's exports unexpectedly fell by their most in two years in December, while imports also contracted, pointing to further weakness in the world's second-largest economy in 2019 and deteriorating global demand.
China also posted its biggest trade surplus with the United States on record in 2018, which could prompt President Donald Trump to turn up the heat on his Chinese counterpart Xi Jinping in their bitter trade dispute.
"Despite increased optimism after [the] Trump-Xi summit in Argentina, significant uncertainty remains as to whether there could be a deal after March 1," wrote Citigroup economists in a note.
By Sudip Kar-Gupta; editors: Jason Neely and Mark Potter.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.
As the French luxury group attempts to get back on track, investors, former insiders and industry observers say the group needs a far more drastic overhaul than it has planned, reports Bloomberg.