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A Punishing Month for U.S. Luxury Stocks

There’s still time for one more “April is the cruelest month” jag, even on the second day of May. Let’s look back at last month’s harsh treatment of luxury brands: Every U.S. stock in the category declined in April, with an average loss of 5.8 percent, even while the broader market was basically flat.

Movado (MOV), which makes watches and jewelry, fell the most in the group, at 15.3 percent, followed by leather goods seller Coach (COH) at 11.4 percent. Other big luxury losers included Tumi Fossil (TUMI), Ralph Lauren (RL), Tiffany (TIF), and PVH (PVH).

The declines come after a big March that saw the biggest increase in consumer spending since August 2009. The underperformance is unusual because the higher end of the market has typically been outpacing the rest of the economy, in areas from cars to real estate, as inequality increases.

European luxury brands avoided the U.S. decline, with Burberry (BRBY:LN), Safilo Group (SFL:IM), and Rémy Cointreau (RCO:FP) all up more than 7 percent in April (as measured in local currency). The Standard & Poor’s Global Luxury Index, a group of 80 publicly traded luxury goods and services companies worldwide, fell just 0.9 percent in April.

Maybe the U.S. luxury retailers should shift to selling more in the suddenly red-hot socks category.

Nick Summers covers Wall Street and finance for Bloomberg Businessweek. Twitter: @nicksummers.

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