Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Italy sees fashion sales hit due to China virus, Pandora warns of business freeze

Stock Markets Feb 04, 2020 01:06PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Claudia Cristoferi and Silvia Aloisi

MILAN (Reuters) - Italy's fashion industry expects revenues to fall 1.8% in the first half of 2020 due as the coronavirus outbreak hits sales, an industry official said on Tuesday, as jewelry maker Pandora warned business in China had ground to a halt.

Several high-end brands also said they had shut down stores in China, the world's biggest luxury goods market, stoking concerns that the industry could face significant damage to sales if the virus is not contained quickly.

Carlo Capasa, head of Italy's national fashion chamber CNMI, said the coronavirus outbreak would cause turnover for the Italian industry to fall by 1.8% in the first six months of the year, mostly in the first quarter.

Home to the likes of Prada (HK:1913), Armani and Moncler (MI:MONC), Italy is second only to France among European countries for fashion and luxury goods sales. Total turnover for the sector was 90 billion euros last year, or about 5% of gross domestic product in the euro zone's third biggest economy, according to CNMI figures.

"In December the outlook for 2020 was a return to our historical annual growth rate of around 3%, but all that changed with the China virus spreading," Capasa said.

"The full economic impact can't be calculated yet, but we would be lucky if the sector grew 1% this year."

Chinese shoppers fueled a decade of growth for the luxury goods industry and today account for 35% of the sector's global sales, estimated at 281 billion euros last year by consultancy Bain & Co.

But the coronavirus has seen parts of China put under quarantine, flights halted and many Chinese cancel trips abroad, including during the New Lunar Year holiday, a peak retail season in China and overseas.

Companies around the world have warned that the outbreak could disrupt supply chains or hurt bottom lines.

Ralph Lauren Corp (N:RL) said on Tuesday it has shut about half of its 110 stores in China due to the disease, which has so far killed over 420 people.

Tiffany & Co, bought recently by LVMH (PA:LVMH), said it had also temporarily closed several stores in affected areas.

` "As I sit here and watch the Chinese business, it is in a standstill mode, I mean there's pennies being sold," Pandora's Chief Executive Alexander Lacik told Reuters on Tuesday, describing an "unprecedented" drop in business.

The Danish company, about 10% of whose annual sales are to Hong Kong, China and its tourists, has closed 70 of its 240 shops in China on government orders, customer traffic at other stores, mostly in shopping malls, is "next to none", Lacik said.

Capasa said three Chinese designers had been forced to cancel their shows at Milan's Women's Fashion Week on Feb. 18-24, and about 1,000 Chinese people who had been expected to attend would now likely not show up.

"The Chinese are big spenders, for us this is quite relevant," he said.

Italy sees fashion sales hit due to China virus, Pandora warns of business freeze
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email