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 LVMH fell in early trading on Wednesday even as its all-important fashion and leather goods unit did better than expected in the third quarter, with the broader luxury sector also rattled by lingering fears of a Chinese slowdown.
Concerns over an ebbing in demand for branded goods among Chinese consumers have hit luxury stocks in recent days, as a trade war between Beijing and Washington simmers.
Falls in the yuan have also added to concerns that shoppers will lose purchasing power.
LVMH on Tuesday reported a 14 percent rise in comparable sales in its key handbags and fashion division, home to its Louis Vuitton and Christian Dior brands, beating forecasts, and overall revenues were in line with expectations.
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But that was not enough to reassure investors, with LVMH shares down 4.7 percent by 07:25am GMT.
"I think the market is in sell the news mode, anticipating a looming slowdown due to the trade war," a trader in Geneva said.
Brokers at Morgan Stanley downgraded the luxury goods sector to "underweight" on Wednesday, also adding to pressure on industry stocks.
Shares in Gucci-owner Kering were falling just over 4 percent on Wednesday morning, with those in Britain's Burberry down 2.7 percent and French handbag market Hermes down around 3 percent.
By Sarah White, Danilo Masoni and Blandine Henault; editor: Sudip Kar-Gupta.
The designer has always been an arch perfectionist, a quality that has been central to his success but which clashes with the demands on creative directors today, writes Imran Amed.
This week, Prada and Miu Miu reported strong sales as LVMH slowed and Kering retreated sharply. In fashion’s so-called “quiet luxury” moment, consumers may care less about whether products have logos and more about what those logos stand for.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.