Luxury goods giant’s shares slump as much as 5.5% in Paris
LVMH ’s sales of fashion and leather goods declined in the fourth quarter, casting doubt on the prospects for a quick recovery in luxury demand.
LVMH shares fell as much as 5.5 per cent in Paris early Wednesday, after rallying more than 30 per cent from their low of last November. The results pulled down rival luxury firms as well. Gucci owner Kering tumbled as much as 7.8%, while Moncler slid as much as 3.2%.The results in fashion and leather goods failed “to stand up to the upgraded expectations on the back of the recent Richemont major beat,” said Bernstein analyst Luca Solca in a note.
“What I expect is to see a gradual recovery,” LVMH chief executive Bernard Arnault said of China during a presentation on Tuesday. “The environment was severely impacted by Covid, then there was a strong recovery, followed by another crisis – the real estate crisis – so it’s going to take some time.”
Still, there were signs of resilience at the luxury group. Sales at the watches and jewellery unit, which includes Tiffany and Bulgari, unexpectedly rose in the fourth quarter, more evidence that wealthy shoppers are favouring so-called hard luxury items, rather than the soft luxury of handbags and evening wear. Tiffany sales rose 9% in the period.
Arnault also said he’s confident that struggling brand Dior will make progress this year, and predicted a “booming” US market, a country he visited last week for President Donald Trump’s inauguration.
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