Luxury stocks slump as Gucci sales slide

Luxury stocks tumbled Wednesday after a profit warning from Gucci parent Kering laid bare a sharp slowdown in once soaring demand for high-end goods, especially in China.

Luxury stocks tumbled in Europe Wednesday after a profit warning from the owner of Gucci laid bare a sharp slowdown in demand for high-end goods, especially in China. Shares of Kering plunged as much as 15% in Paris, while LVMH, Europe’s second-most valuable company and owner of brands such as Louis Vuitton and Tiffany & Co., was more than 3% lower at one point. Switzerland’s Richemont, which makes Piaget watches, Montblanc pens and Van Cleef & Arpels jewelry, slipped 3%. In London, homegrown British brand Burberry, which also warned of lower profits in January, sank as much as 6% Following a bumper few years in the wake of the pandemic, luxury goods companies are now contending with weaker demand in one of their biggest markets: China. Consumer sentiment in the world’s second biggest economy has soured due to a protracted property market slump and related slowdown. In an unscheduled trading update published late Tuesday, Kering said sales at its biggest brand Gucci are expected to have tumbled nearly 20% year-on-year in the first quarter, due to a steep decline in the Asia-Pacific region. Overall, comparable sales at Kering will be down 10% for the period. “The magnitude of the warning is jarring and is raising further concerns about the state of high-end consumer demand,” Adam Crisafulli, a former JPMorgan analyst and founder of market intelligence firm Vital Knowledge told CNN.