Luxury goods makers may struggle this year in Europe as retailers reduce orders and local demand wilts, according to Gianluca Brozzetti, chief executive officer of fashion company Cavalli Group.
In general, the market for high-end goods “is clearly in difficulty,” particularly in central and southern parts of the region, Brozzetti said today before the Just Cavalli runway show in Milan. Exceptions are cities popular with Chinese tourists and department stores that have overhauled their outlets.
In Europe, third-party distributors are buying less as they seek to shift inventory, while local shoppers have cut spending in the past six months, said the CEO of Florence, Italy-based Cavalli. “There’s a lot of hesitancy,” he said, echoing comments by Patrizio di Marco, CEO of PPR SA-owned Gucci.
Sales of luxury goods may grow 4 percent in Europe this year, excluding currency swings, estimates Thomas Chauvet, an analyst at Citigroup Inc. in London. The forecast “reflects a combination of weak domestic demand largely offset by robust tourist-driven demand,” Chauvet said by e-mail.