Luxury groups with substantial watch portfolios were caught up in sharp falls on global stock markets yesterday that were blamed on the growing threat to businesses from the ongoing Coronavirus outbreak.
LVMH’s share priced dropped by 5% on Monday as a surge in Coronavirus cases was reported in Italy, sparking fears that the virus could spread rapidly across Europe.
Swatch Group and Richemont were down by similar percentages.
Luxury goods companies across the board have seen analysts trim their forecasts for at least the first quarter of 2020 because of the importance of sales in China and Hong Kong in addition to the spending Chinese nationals account for as they travel the world’s tourism hot spots of London, Paris and New York.
Switzerland reported its first case of Coronavirus yesterday, putting additional pressure on the country’s major watch fairs that are closely monitoring the spread of the virus.
Swatch Group has been hardest hit, with shares slumping by over 13% since the start of 2020 and down more than 27% from their 52-week high.
Richemont and LVMH are thought to be slightly less exposed to a downturn in spending from the Chinese.
Richemont’s shares are down 9.1% since the start of the year and 19.5% from their 52-week high.
LVMH stock is down 7.9% from January 1 and 12.1% since its 52-week high.
