Burberry’s warning that its same-store sales had seen “a deceleration in recent weeks” sent a cold chill through luxury in both Europe and the U.S.
Angela Ahrendts, Burberry’s chief executive officer, noted that external environment had become “more challenging” and that the company is up against strong year-ago growth. “Given this background, we are tightly managing discretionary costs and taking appropriate actions to protect short term profitability,” she said.
Burberry’s stock led the way down with a decline of 20.3 percent to 10.96 pounds as the London Stock Exchange started to wrap up trading for the day. The luxe names losing ground in Europe were Salvatore Ferragamo, down 5.4 percent to 17.13 euros; LVMH Moët Hennessy Louis Vuitton, 3.8 percent to 127.25 euros; Tod’s, 3.5 percent to 87.65 euros; PPR, 2.7 percent to 124.50 euros, and Hermès International, 1.4 percent to 221 euros.
The pound traded for $1.60 against the dollar as the euro went for $1.28.
Shares of high-end brands were also taking a beating in early trading on Wall Street, where the market has already been prepped this year by Tiffany & Co. to be on the watch for signs of luxe weakness.
Among the decliners were, Ralph Lauren Corp., down 3.3 percent to $155.09; Tumi Holdings Inc., 3.1 percent to $24.14; Michael Kors Holdings Ltd., 2.2 percent to $52.30; Tiffany, 1.8 percent to $61.89, and Coach Inc., 1.4 percent to $61.72.
Overall, the S&P Retail Index was down 0.2 percent, or 1.27 points, to 655.28, missing out on the rally seen in the Dow Jones Industrial Average, which was up 0.6 percent, or 83.89 points, to 13,338.18.