European Luxury Shares’ $240 Billion Rout Is Just the Beginning
- Some analysts see a slower-for-longer outlook for luxury firms
- Analysts are cutting profit forecasts as turnaround hopes wane
A Burberry Group Plc store in Shanghai.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
After enduring almost a quarter-trillion dollar hit to their market value in recent months, Europe’s luxury firms may see their stock-market clout wane further as China’s downturn worsens.
Once seen as Europe’s answer to the US “Magnificent Seven” tech megacaps, shares in companies producing high-end clothing, handbags and jewelry are languishing, sapped by a spending slump. Even more ominous are signs that China’s rich, who once flocked to upscale boutiques in Paris, Milan and Hong Kong, may not return, their appetite for pricey items extinguished by the economy’s downward spiral.