European luxury shares fall as Chinese luxury market rebounds


Joe Baker
Joe Baker
Senior Copywriter
Joe is a Senior Copywriter working on reports, news and analysis. Previously, he worked as a B2B copywriter, journalist and editor covering a broad range of topics, including technology, transport,… Read more
  • European luxury shares have dropped to their lowest level in seven weeks.
  • Even after its recent drop in value, the STOXX Europe Luxury 10 index is above its initial year-start worth by more than 20%.
  • Luxury executives observed strong developments in the Chinese market, despite decreased US trends.

European luxury stocks dropped to their lowest level in seven weeks on 24 May. However, investors are optimistic about the Chinese luxury goods market as it unlocks restrictions following the covid-19 pandemic.

Carlo Benetti, a market specialist with GAM Investments, highlighted the importance of exposure to luxury goods in a well-diversified, high net-worth portfolio, especially for Chinese consumer spending.

He said that “expectations of a 25-30% recovery in Chinese luxury consumption in 2023 seems too conservative”, particularly considering the expected solid recovery in Chinese travel during the summer due to high net-worth individuals (HNWIs) turning to Chinese luxury as a new source of entertainment.

Benetti suggested that the idea of “revenge spending” (the urge to spend money to make up for lost time) is still prevalent, with many HNWIs still desiring luxury items.

He predicts that HNWIs investing in the Chinese tourism market, and enjoying Chinese luxury items, will be the main aid in the market’s rebound.

The STOXX Europe Luxury 10, which tracks prominent luxury goods companies such as LVMH, declined by 1.5% at 09.14 GMT, following a 4.3% decrease on 23 May.

Despite being the largest single-day drop since March 2022, the luxury index is soaring above its initial year-start worth by more than 20%.

There are concerns over a decrease in demand for luxury items from the US as a downward trend continues after a successful year that fuelled positive market activity in Europe.

After attending meetings at an industry conference in Paris, Morgan Stanley analysts reported that the US sector’s downturn was not a fundamental issue for the global luxury market as HNWIs are turning to Asia to buy their luxury goods.

HNWIs looking to purchase luxury goods in China from abroad should consider using a safe money transfer service.

HNWIs must also access a dependable international payments service when purchasing from the luxury goods market. International HNWIs can shop confidently from overseas knowing that their financial information is secure and protected.

Analysts claim that for the sector to continue its ascent, it must deliver steady earnings growth, which is achievable as luxury market growth is at record levels.

HNWIs looking to invest or purchase luxury items from overseas can use our money transfer comparison tool to find the best money transfer rates

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