Beware of luxury, because it is slowing down. The alarm was raised by Bank of America, which drafted the Global Luxury Demand Indicator. And they found that the indicator of global luxury demand went negative. Not only that: it fell to its lowest level since the second quarter of 2016. In the fourth quarter of 2019, in fact, it lost along the way 0.3%, compared to the previous three months.
Tensions in Hong Kong and the not-clear trend of the Japanese market have a negative impact on the Global Luxury Demand Indicator. The Chinese market remains the most performing and promising one. Stability is, however, the watchword in Europe. The North American market is also defined as “stable”, but appears ready to move towards positivity. In the fourth quarter, in fact, the luxury sector in the USA and Canada is expected to grow by 5.7% compared to 5.2% in the previous quarter. In Asia, however, the October-December period is estimated by Bank of America to decline by 11%.
Who gets on, who doesn’t
The Global Luxury Demand Indicator not only invites everyone to be careful regarding luxury, but also estimates the trend of some groups. It indicates LVMH and Kering among the “hottest” and most solid titles. Unlike Richemont, Burberry, Ferragamo and Tod’s, being the groups in which EBIT could decrease.