Luxury brands lower outlook
A luxury brand analyst predicts Asia will remain an engine for growth for many luxury brands.

Mulberry in particular, was a very specific case-in-point people are keen to point out because of the M-tint profit warning for this firm, but when you start seeing companies like Burberry saying

things are slowing down, then people get really worried.
Yes, they do. But also like you said, but Mulberry itself was a very specific case, whereas Burberry they actually posted an almost 8% growth the first half of this year. They are saying that

potentially going forward there are worries. But we have seen this year that market sentiment itself is, you know, affected by a number of things, including the Ukraine-Russia crisis, crisis in the

Middle East and also what’s going on in Hong Kong as the moment. So people are slightly fearful of the Chinese market. However we are confident that although double digit growth us probably a

thing of the past, Asia is still very much an engine for growth for many luxury brands.
But just growth that’s quite a bit flattened than expected, right?
Yes I think so.
Are those companies getting used to that trend though because investors seem to have been expecting the luxury goods sector to just keep on outpacing all of the sectors, it’s even showing the

downbeat days of a recession. We kept hearing that firms like Burberry were still posting rises in their profits.
Well, I think the sector itself is still positive, I think potentially some of the big name brands like you’re seeing such as Louis Vuitton, many of caring’s brands Gucci are suffering

potentially, but they’re in the press all the time. So any potential downfall will be front-page news. However if you look at some of their other brands which is slightly smaller but take of a

matter, they are doing very well. And they are growing, so potentially it’s these more niche brands we are seeing a greater sophistication of the luxury consumer and they are being more particular

about which brands they choose.
We’ve seen firms like Jimmy Choo going public on a week like this. They’ve gotta be brave, because actually the luxury goods sector seems to be turning as you said as investors assess exactly how

much dividend growth and profit growth these companies can achieve, right?
I think Jimmy Choo is quite a particular case, it really sits in very much the sweet spot of the luxury sector with regard to its category, and luxury shoe growth has reported one of the strongest

growth rates this year compared to the rest of the sector. It’s also an iconic brand, it takes off all the luxury go-to points such as having brand heritage and made in cachet, its products are

made in Italy, exquisite craftsmanship. So you know, it’s still a very popular brand and also its popularity in Japan and Chinese market will help the brand.
So accessories, particularly shoes are doing well, the trench coats and main designers are having a more difficult time.