A PROFIT warning by the parent of luxury brand Gucci has reverberated across the global luxury goods sector, sending shares in both the firm and its peers tumbling.
Shares in
Deteriorating Gucci sales in
The brand, best known for its belts, has now seen sales decline for two consecutive quarters.
The update knocked shares in luxury retailers across the board, retailers such as
The problems can be traced to
Earlier this week it was reported that exports of pricey Swiss watches such as Rolex and TAG Heuer fell for the second time in three years, led mainly by lower deliveries to
Alongside recovery from the pandemic,
This, coupled with what has been dubbed a "richcession" in other western markets, has hindered sales of designer brands.
"Coming out of the pandemic, the luxury sector experienced a boom period. Rising asset prices, fuelled by liquidity injections from governments, contributed to the wealthy getting wealthier."
Huggins said luxury spending will bounce back, but "there could easily be further weakness before that happens."
Earlier this year, analysts at Jefferies agreed to cut their 2024 industry demand growth assumption for global luxury brands from four per cent to two per cent.
(c) 2024 City A.M., source