Luxury-goods stocks in Europe plummeted this week, losing over 25 billion dollars in market value, reported Bloomberg, primarily due to concerns raised by Richemont Chairman Johann Rupert about inflation impacting regional demand.
LVMH, formerly Europe's largest company, saw a 3.6 percent drop in its stock price, reducing its market capitalization to below 400 billion dollars. Other luxury groups like Richemont, Swatch, Kering and Hermes International also faced declines.
HSBC Holdings issued a note cutting estimates and price targets in the luxury sector due to a stronger euro and higher short-term growth costs, said Bloomberg. These challenges add to ongoing worries about China's economic slowdown, which affects about a fifth of industry revenue. The luxury sector is also grappling with a post-pandemic sales decline after a surge driven by low interest rates and pent-up savings.