LUXURY & FASHION | Sector view The worst in China should be behind us
Since Mid-March 2022, the sanitary situation in China has significantly worsened leading Chinese authorities to implement very strict lockdown measures in main cities. Actually, Shenzhen has been under lockdown during two weeks, ending on March 27th. Shanghai has begun its lockdown on March 27th. This led to a 11% decline of retail sales in China for the month of April. This, combined with the interest rate increase and the consequence of war in Ukraine and fears on consumption trend led on the last three months to a clear derating of our luxury groups socks sample (-19% on last 3m). Nevertheless, meanwhile the trend seems still quite good both in US and in Europe and also in some others Asian countries. Consequently, we argue that the worse is likely behind us and it is time to come back on luxury stocks. Furthermore, valuation are quite attractive (18% discount vs 5Y historical average) and the USD is a clear tailwind for the sector.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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