What goes up, eventually must come down. Fears of a Chinese slowdown in demand for luxury goods are hitting the luxury stocks pretty harshly today. Here’s what the ticker says at the time of this writing:
- LVMH -5% (still up +14% the past year)
- Hermes -5% (1 year change +18%)
- Kering Group -6% (1 year change +21%)
- Richemont Group -3% (1 year change -15%)
- The Swatch Group -3% (1 year change -12%)
Trigger for this negativity on a sunny October Wednesday? LVMH released good Q3 numbers… but somehow not good enough to make people believe the group – and the entire Luxury sector with it – is in well enough shape to ride out the storm forming on the Eastern front. In addition, LVMH commented on the fact that Chinese Customs is enforcing rules on bringing goods back into the nation. That is terrible news of course for the boutiques around the world (and Paris no doubt) which are a popular destination for tourists looking to pick up some goodies prior to heading back home.
LVMH, Hermes & Kering are not (at all) strictly watch companies of course, and their 1 year change is still very satisfying. The more watch focused groups however (Richemont & Swatch) don’t look as rosy whatsoever.