Forecasts of a slowdown in the Chinese market and the difficulties faced by department stores are having an impact on the luxury goods sector. Despite the successful test run by Sabata De Sarno, the new designer at Gucci, its flagship house, Kering is struggling on the stock market. But other luxury goods stocks have also been falling sharply in recent days…
The horizon is darkening for the luxury goods industry, both on the markets themselves and on the stock market.
While the Houses compete with each other to attract attention during the Fashion Week marathon, their 2023 performance could well fall well short of the record-breaking figures recorded in 2022.
A number of recent announcements have undermined the morale of luxury investors.
Last Monday’s downward revision by Standard & Poor’s (S&P) of its forecasts for China, the main luxury goods market alongside the United States, struck a chord.
Slower growth in China
According to S&P, economic growth in the Middle Kingdom is expected to reach only 4.8% instead of 5.2%, its previous estimate.
The bad news comes at a time when the other major luxury destination, department stores, are also experiencing difficulties across the Atlantic.
Another factor adding weight to the case is the recent statements made on Bloomberg TV by Rachid Mohamed Rachid, President of the Valentino fashion house. He is also Managing Director of Mayhoola, the Qatari investment fund that owns Valentino and French fashion house Balmain.
However, Rachid Mohamed Rachid was rather pessimistic about the future of luxury goods, expecting that 2023 would not be, as 2022 had been (with growth of up to 20% in certain zones), a new year of resilience for the sector.
Valentino’s turnaround
These statements seem to shed light on Valentino’s apparently more cautious strategic shift. The House, which had been considering an IPO, finally approached Kering this summer. This summer, the luxury goods group headed by François-Henri Pinault announced its intention to acquire a 30% stake in Valentino for 1.7 billion euros. There’s strength in numbers, even among the richest.
Discover our plans Subscribe for 1€ Become an active member of the community of luxury leaders.
To continue reading this article, subscribe or log in to your account
Read also > RUSSIA’S ALROSA SUSPENDS DIAMOND DELIVERIES FOR SEPTEMBER-OCTOBER AT INDIA’S REQUEST
Featured Photo: Unsplash
