Disappointing figures from the luxury goods conglomerates LVMH and Kering as shoppers reined in spending on handbags, designer clothing and champagne have hit the value of firms in the sector around the world amid fears of ongoing weak demand. Shares in LVMH, which owns Louis Vuitton, Dior and Tiffany, slid nearly 5% as it revealed that sales in the key Asian markets, excluding Japan, were down 14% in the three months to June amid weak demand for Cognac in China and slowdowns in demand for fashion, watches, leather goods, perfumes and cosmetics. Analysts said lower-priced goods, including some handbags, were performing worse than higher priced items such as garments.
Shares in Kering were down more than 4% as group revenues fell 11% in the first half of the year to €9bn, led by an 18% slump at Gucci. Group underlying operating profit slumped 42% to €1.6bn with Gucci, Bottega Veneta and Yves Saint Laurent all down significantly.
The company warned profits could be down 30% in the second half of the year compared with the same period last year amid “uncertainties weighing on the evolution of demand from luxury consumers in the coming months”. François-Henri Pinault, the chair and chief executive of Kering, said: “In a challenging market environment, which adds pressure on our top line and profitability, we are working assiduously to create the conditions for a return to growth.” Bag maker Hermès International, the British brand Burberry, Coach owner Tapestry Inc.