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With yachts bobbing along the Mediterranean coast and preparations for the Formula One Grand Prix under way, there was little sign of pessimism among executives gathered for the Financial Times’ Business of Luxury summit in Monaco this week, the principality a perennial favourite of the wealthy who have powered the recent boom in luxury goods. Top figures in the industry expressed confidence that business would continue to thrive, driven by affluent buyers globally, despite fears of a slowdown that wiped off around $60bn in market value from the sector during a two-day sell-off earlier this week. The falls were spurred by concerns that demand — which has been driven by China and the US — could finally be moderating, as expressed in a note by analysts at Deutsche Bank as well as at a Morgan Stanley investor conference.
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Shares in sector leader LVMH were down 5 per cent on Tuesday, while those of Hermès and Kering lost 6.5 per cent and 3 per cent respectively. The trio continued to fall on Wednesday in line with declines in the wider European market, as global equity investors worried about growth prospects and the unresolved debt ceiling debate in the US. However, speaking earlier at the FT summit in Monaco, LVMH executive Sidney Toledano cautioned against such bearishness and said top brands such as Louis Vuitton or Dior would remain resilient, even if there were a slowdown, because of their global reach, “genuine creativity” and marketing knowhow.
