Accessories Amazon Asda Christmas Expansion & Franchise Fashion HR News High Street John Lewis London Marks & Spencer Media News Results Retail Retail and Consumer Industry Retail news Sainsbury's Store Tesco UK brand china consumer deal deals and rumours department department stores e-commerce electricals expansion fashion news food grocer group launch luxury morrisons my online online retail people profit property retail property retailer sale sales supermarket waitrose
Prada “will not be immune” as Burberry warning sends investors in a spin Wednesday, 12th September 2012
Prada navigates stormy conditions in its latest campaign. Photo credit: Prada S.p.A.
Signs of a paradigm shift for China’s luxury market prevailed on Wednesday, as shares in Italian fashion house Prada fell nearly 4 per cent after Burberry’s unscheduled profit warning this week.
It seems the after-effects of the surprise announcement from the British fashion house have been felt across the globe, as shares in Prada fell to their lowest in three weeks. The news couldn’t have come at a worse time for the luxury market, after recent Chinese data emerged suggesting a further slowdown of the world’s second-largest economy.
According to Reuters, China’s retail sales growth for all consumer goods including luxury slowed to 13.2 per cent year-on-year in August to CNY 1.67 trillion, from 18.1 per cent growth in December.
For many, Burberry’s shock profit warning on Tuesday was long overdue. Analysts have been warning of a slowdown in China’s economy for months, as luxury retailers' reliance on Asian markets begin to look increasingly precarious.
Shares of Prada fell as much as 3.9 per cent to HKD 57.65, their lowest since 24 August.
"Prada will not be immune," Gloria Tsuen, an analyst at CIMB, wrote in a research note reported by Reuters. "We think the long-awaited slowdown in luxury consumption driven by global economic and political uncertainties is finally starting to have a meaningful impact on performance."
Burberry saw GBP 1 billion knocked off its market value on Tuesday, after an unexpected trading update warned like-for-like sales at the group had ground to a stop in the 10 weeks to 8 September, and have even started to fall in recent weeks.