Bloomberg's Andrew Roberts reports this morning that luxury goods companies are seeing a global slowdown in sales, indicating that economic instability is finally hitting an area of the world that has thus far proved resistant: Asia.
In China, where a boom in demand for watches and jewelry has spurred sales gains for some companies, the economy grew at the slowest pace in three years in the second quarter. Europe’s debt crisis is damping the economic outlook and the region’s banks have laid off 172,000 workers since 2009, while the U.S. unemployment rate has been above 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
Luxury goods makers such as LVMH (Burberry, Louis Vuitton, etc.) and Richemont (Cartier, Montblanc, etc.) benefitted greatly in the wake of the 2008 financial crisis as wealthy shoppers' fortunes rapidly rebounded; it now appears that the ongoing economic troubles in developed economies are finally curtailing growth in emerging markets.