Europe's beleaguered luxury sector could be set for a turn in fortunes this year, as early indicators point to improved consumer spending and a pivot away from China. Luxury shares shot up in trading last week after Cartier owner Richemont reported its "highest ever" quarterly sales in the three months to December, indicating a rebound in consumer demand over the festive period, which analysts say could be set to continue into 2025. The Swiss luxury stock gained 16% on the day, while the European Stoxx luxury index added 6.
9% as positive sentiment filtered through to fashion powerhouses LVMH , Hermes , Kering , Moncler and Burberry . The earnings beat is considered a positive initial signal ahead of wider fourth-quarter releases from a sector that has been plagued by waning consumer spending, particularly within the all-important China market. "There is an element to the Richemont numbers that is definitely down to an improved cyclical demand environment," Luca Solca, managing director and sector head of global luxury goods at Bernstein, told CNBC over the phone Friday.
"This is clearly going to be a tide that lifts all boats," he said of improved macroeconomic conditions globally. "Expectations are now higher for other companies due to report this earnings season," UBS said in a Friday note. However, the improved economic environment is unlikely to be a silver bullet for all firms, BofA Global Research said, describing the year ahead as a game of "snakes and ladders.
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