Cavalli boss: Don’t panic, luxury sector is healthy
14/09/2012
He said demand from China may have slowed but "we should avoid panicking because of an announcement of an individual company”.
Gianluca Brozzetti, speaking at the Reuters Retail and Consumer Summit, added: "They made some promises to investors and probably those promises were too aggressive. But it's one thing to say the performance of Burberry is not meeting its objectives... and it's another thing to say the luxury market has problems."
While industry sales growth in China had slowed from levels around 20% to 25% at the height of the boom, Brozzetti said that pace was unsustainable, and demand remained healthy.
"People are getting richer (in China) and, as soon as they get richer, they want to have their reward by buying a luxury product. That is not changing," he said.
However, Marco Belletti, global head of consumer retail and luxury at the corporate finance division of Societe Generale, said mergers and acquisitions in the luxury sector might be delayed as the market weighs up the implications of Burberry’s announcement.
"In the short-term, valuations of luxury assets will be affected,” he said. "We are just seeing the first signs of this correction. The next month will be critical to understand what is happening in the sector. We will see what other luxury brands have to say.”
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