A rendering of Louis Vuitton's future flagship at Place Vendôme.


PARIS — “R.I.P. Usa,” Riccardo Tisci wrote on Instagram beneath a black screen, summing up a mournful mood in Europe as the Continent absorbed news of Donald Trump’s win in the U.S. election and contemplated the possible fallout.

The upset sent European stock markets tumbling in opening trading, though Paris, London and Frankfurt ended the day in positive territory.

Meanwhile analysts warned of negative consequences for luxury and touted positive ones for accessible fashion.

“Volatility will almost certainly increase; the fundamental reality is that we don’t know what kind of U.S. we are now faced with given the lack of policy detail through the campaign,” RBC Capital Markets said in a report on Wednesday.

“Potential outcomes range from a pro-growth conservatism which could ultimately be positive for markets to a more nationalist protectionist outlook which largely would not be. Only time will tell. We expect valuation discrepancies will open up in the meantime,” the report added.

At the end of trading, Germany’s DAX gained 1.6 percent to 10,646.01; France’s CAC 40 1.5 percent to 4,543.48; and London’s FTSE index 1 percent to 4,543.48. Milan’s FTSE MIB index eased 0.1 percent to 16,799.85.

The euro ended the day at $1.10, while the pound fetched $1.24 and the Swiss franc equaled $1.03.

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In the longer term, the Trump victory is expected to boost the U.S. dollar’s strength against the British pound and the euro, which would benefit consumer staples the most and luxury the least, with retail somewhere in between, according to RBC.

It forecast that staple names with strong balance sheets, such as high street chains Inditex and H&M, will outperform while stocks with heavy exposure to sourcing in U.S. dollars will be vulnerable to a sell-off. The latter category includes U.K. retailers Sports Direct, Next, Debenhams and Marks & Spencer.

“Luxury goods as a concept is the notion of ‘feel good purchases’ and the Trump victory and implied risk-off equity markets increases uncertainty and lowers confidence in the global/U.S. economic outlook. This is therefore negative for European luxury stocks at least in the short term,” RBC said.

“Longer term, our strategists believe the Trump victory will be USD positive — which is helpful for the European luxury sector given positive revenue translation (according to our estimates a 10 percent USD appreciation would drive nearly 20 percent EBIT upgrades on average,)” it added.

A stronger dollar would continued to restrict tourist spending in places such as California, New York and Florida, likely benefiting other destinations such as the United Kingdom, it concluded.

Luca Solca, managing director at Exane BNP Paribas, called Trump’s victory a “clear negative for luxury goods stocks.”

“This scenario would likely see selling pressure on equities,” he wrote in a recent report. “This could dent global consumer confidence but especially in the U.S.A., where households are heavily exposed to the stock market.”

Given Trump’s protectionist leanings, he said such policies would hurt emerging markets, dampening luxury demand.

He also forecast downward pressure on the U.S. dollar, and higher interest rates, which would be a “double whammy” for luxury goods players.

“The stocks most negatively impacted are likely those highly exposed to USD, namely Luxottica, Brunello Cucinelli, Ferragamo and Burberry,” he said. “Stocks with high exposure to JPY, such as Hermès and Moncler, should be safe havens.”

Meanwhile, designers and industry figures expressed mainly surprise and distress at the election upset, as Democrat Hillary Clinton was seen as the favorite in pre-voting polls.

“Ominous,” said Rick Owens, a California native now based in Paris. “It seemed like an alarm had been sounded at the beginning of this campaign, but I felt my vote would be a symbolic gesture because I couldn’t really see it going this far.   Now it feels like a personal threat.

“Have I misjudged the needs and aspirations of a broader community that I am still a part of?” he mused. “I’ve been thinking about evolution a lot and how to prepare for inevitable transitions gracefully. I thought this mood might be a general pessimism on my part. But maybe it’s not.”

“Trump president of the United States of America. My thoughts go right away to my American friends who must be so sad and worried. Who wouldn’t be? ” Pierre Bergé tweeted.

“It is always dangerous to be too sure,” said Karl Lagerfeld, who declined comment on the election result as he is German, not American.

“My candidate would have been Michelle Obama,” he said.

Asked about the impact on the fashion industry, he replied: “Not sure it will be affected. Look at (French President) Francois Hollande. He said he would vote for Hillary. This is not our business.”

Hollande, who had criticized Trump over the last few months, said on Wednesday that his win opens a “period of uncertainty” that he intends to address “with lucidity and clarity.”

After congratulating Trump “as it is natural between two heads of democratic states,” the embattled Socialist leader stressed that, “what is at stake is peace, the fight against terrorism, the situation in the Middle East, economic relations and the preservation of the planet.

“On all these issues, I will engage without any delay a talk with the new U.S. administration,” he said, noting that “the United States are a very important partner for France.”

“France will also continue transatlantic cooperation, with no compromise and independently,” he added.

French designer Simon Porte Jacquemus looked ahead to the French elections.

“I hope that we’ll focus our energy not only to post images on our social media but that we’ll talk about it around us, so that it doesn’t happen here in May 2017,” he  told WWD. “We have until December to register to vote. Let’s act.”

Paris Mayor Anne Hidalgo reacted on her Facebook page on Wednesday morning.

“Many of us in Paris followed the U.S. election results last night,” she wrote. “This morning, the shock is brutal. Donald Trump is about to become the 45th president of the United States of America. This is very bad news for social harmony and for the great challenge of the 21th century that the fight against climate change represents. The result marks a deep divide in American society[…] We must question ourselves. It is not unique to the United States: Europe and France are also being exposed. We must improve our education systems, share progress, give our children hope to thrive and live in better conditions than us.

“My thoughts go to Hillary Clinton, to all my Democrats friends who are mayors of major U.S. cities,” she said. “I think of Bill de Blasio, Mayor of New York; Muriel Bowser, Mayor of the District of Columbia; Rahm Emanuel, Mayor of Chicago; Eric Garcetti, Mayor of Los Angeles and Ed Lee, Mayor of San Francisco. I want to tell them that hope is at their home, is in their actions in favor of more inclusive cities, more innovative, more resilient and environmentally friendly. They have my full support and that of Paris.”

François-Marie Grau, managing director of the French Women’s Ready-to-Wear Federation, cited two major concerns.

“The ongoing trade negotiations such as Trans-Pacific Partnership (TPP) and transatlantic treaty are off to a bad start. Donald Trump also wants to reconsider existing agreements such as North American Free Trade Agreement. It’s very bad news for the European fashion industry that’s exporting to the U.S.”

Grau noted the U.S. was the sixth largest market for the French clothing industry in 2015.

“Exports of French clothing to the U.S. were up 17 percent in 2015, compared to the previous year. Another negative impact could be the variation of the exchange rate between the euro and the dollar, with a very strong euro making European goods less competitive,” he added.

In Italy, executives had measured comments.

“I think Hillary Clinton lost because she was not innovative enough, she did not speak to the younger generation, focusing on their problems and ways to solve those problems. I was surprised, but not too much,” said Renzo Rosso, founder of OTB, parent of Marni, Maison Margiela and other brands. “I hope the strong statements made by Donald Trump during his campaign will be softened during his mandate, as it often happens. In terms of business, we must be positive and hope that the country will fare well, independently of whoever is the president, creating new jobs and new wealth.”

Carlo Capasa, president of the Camera Nazionale della Moda, noted that America represents Italy’s No. 2 market for fashion exports.

“It’s a country we feel very close to, with which we have consolidated relations of trade and collaboration. We strongly hope that the president chosen by the Americans for the next four years will maintain intact the rapport of openness and exchange.”

“It was surely a surprise, an unexpected choice. In any case, it’s a choice that must be respected since it’s the preference expressed by the American people,” said Massimo Ferretti, executive chairman of Aeffe. “The wish is for the excesses of the electoral campaign to be toned down following the realization that the reality is complex both from an economic and cultural point of view. I don’t expect relevant impacts for the luxury sector.”

“The implications of Donald Trump’s victory can be evaluated only in the medium-range, when it will be clearer which of the promises made in his campaign he will be able to implement and when,” concurred Claudio Marenzi, president of industry association Sistema Moda Italia. “Today, the U.S., despite the presence of already strong import duties, represent one of the main areas of export for our products. We expect that the announced protectionist policy in the future will not morph into an isolationist commercial policy; this could generate an additional instability in commercial trade in the world, also due to possible commercial and currency wars.”

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