A global selloff pushed fashion stocks lower Monday as investors reacted strongly to fresh outbreaks in Italy and South Korea.
The Dow Jones Industrial Average opened the U.S. trading day with a sharp decline, dropping 2.8 percent, or 813.11 points, to 28,179.30.
Among those hardest hit were Farfetch, down 10.2 percent to $11.03; Tapestry Inc., 7.8 percent to $25.82; Fossil Group Inc., 7.2 percent to $5.57; Ralph Lauren Corp., 6.9 percent to $109.36; Revolve Group, 5.9 percent to $19.75; Lululemon Athletica Inc., 5.6 percent to $241.63; Capri Holdings, 5.1 percent to $26.25, and PVH Corp., 5 percent to $80.48.
Until now, investors have largely taken a wait-and-see approach to the coronavirus, trying to gauge the potential impact — to both retail sales and supply chains — and hoping that the troubles pass.
But now, with the virus spreading, the market is re-orientating to a potentially worse and longer lasting fallout.
Analysts at stock research firm Cowen said outbreaks in Italy (with 150 new cases over the weekend) as well as South Korea and Iran suggest the coronavirus has become a global pandemic, although the World Health Organization has not officially applied that label.
“It has been four-and-a-half weeks since the Hubei quarantine began and three-and-a-half weeks since the U.S. and a number of other countries around the world began restricting inbound travel from China,” Cowen said, illustrating how quickly the outbreak is moving.
In Milan, the Giorgio Armani runway show was held behind closed doors, filmed in an empty theater without press and buyers. It was distributed through the brand’s web site and social media.
Other events were canceled while others were postponed, including the international eyewear trade show Mido, which was slated to run Feb. 29 to March 2 at Milan’s Rho-Fiera fairgrounds.
European markets took the brunt of Monday’s global selloff, with the FTSE MIB in Milan dropping 5.9 percent to 23,303.18, followed by the CAC 40 in Paris, down 4.1 percent to 5,783.29, and the FTSE 100 in London, off 3.5 percent to 7,144.31.
Among those posting the steepest declines were Tod’s, down 11.1 percent to 31.24 euros; Salvatore Ferragamo Italia, 9.2 percent to 14.49 euros; Safilo Group, 8.2 percent to 1 euros; Moncler, 5.8 percent to 34.99 euros; Kering , 4.5 percent to 536.40 euros; Burberry Group, 4.1 percent to 17.94 pounds, and LVMH Moët Hennessy Louis Vuitton, 4.1 percent to 387.95 euros.
The European Commission said it is “working around the clock to support EU Member States and strengthen international efforts to slow the spread” of the outbreak.
To that end, the commission revealed a 232 million euro aid package.
“As cases continue to rise, public health is the number-one priority,” said Ursula von der Leyen, president of the Commission. “Whether it be boosting preparedness in Europe, in China or elsewhere, the international community must work together. Europe is here to play a leading role.”