European Luxury Sector Continues to Show Polarization Trends

Dow Jones
Aug 12

0929 GMT - The European luxury sector remains highly polarized, with companies that are relatively less affected by the industry's persistent difficulties performing better, Deutsche Bank analysts write in a note. Resilient spending by wealthy consumers stood in contrast to the ongoing pressure on less affluent shoppers, which benefited brands targeting the high-end segment of the luxury sector, the analysts say. Furthermore, some companies continue to depend on a significant improvement in China in order to rebound, while the conflict in the Middle East poses another challenge, they say. The bank expects the same categories to continue to outperform, including jewelry, particularly Richemont; high-end ready-to-wear fashion, with Brunello Cucinelli well-positioned in this space; and turnaround cases such as Burberry.

 

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