Live Markets: Luxury buyers see no pickup in demand yet

Kering SA

Today 11:36

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LUXURY BUYERS SEE NO PICKUP IN DEMAND YET
Luxury could be a potential beneficiary of easing geopolitical tensions, but Berenberg’s latest channel checks show little sign of a demand pickup in the second quarter. Feedback from a panel of buyers and a senior department store executive, together covering around 40% of global luxury spend, suggests trends are broadly unchanged from Q1.  China remains weighed down by structural headwinds, the German bank says, while Europe is “flat at best”, hit by weaker Asian tourist flows and price-sensitive local shoppers.
The United States is doing better, but not enough to change the overall picture: “The U.S. alone cannot carry the sector.”
Performance across brands is split. Privately owned Chanel stands out as a clear winner, but its “extraordinary success” may be coming at the expense of rivals, with a pickup in sales at LVMH’s LVMH.PA Dior missing industry expectations.
Gucci is still “struggling across all markets”, with brand perception issues and ongoing challenges likely to complicate Kering’s PRTP.PA recovery story, despite strength at Saint Laurent. Elsewhere, Louis Vuitton looks broadly flat, Hermès HRMS.PA steady, and Richemont CFR.S is benefiting from resilient jewellery demand. To sum up, Berenberg says: “We remain structurally bearish luxury, and long absolute luxury, short aspirational.”
     
(Danilo Masoni)
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