Moody’s: For a luxury retailer 2017 with growing profits. Far away from the past

In 2017, the growth in profits for luxury retailers will be 7%, a sharp improvement compared to + 4% last year. Unfortunately, for high-end distribution, the pitfalls of the economy are not over. The double-digit growth rates of the 2010-2013 period are far, and unprecedented by 2020. The second half of the year, moreover, will be harder with a general slowdown in growth. This scenario is supported by Moody’s Investor Service’s report, which has studied the trends of 11 luxury groups (including LVMH, Kering and PVH). While high-end financial results will have a certain amount of mergers and acquisitions (there are forecasts of $ 7 billion in the current year, compared to 2 in 2016), there is news on the distribution front. Moody’s analysts welcome the most weighted step in opening up new stores, which counteract the work of improving the already existing retail network productivity. Farewell department stores. It is anticipated, in fact, that luxury groups will tend to get away from the department stores (especially in the USA). Moody’s Vincent Gusdorf’s senior analyst will be affected by the “slowdown in Chinese demand, the high competitiveness of sectors such as tourism and fine dining, as well as the changed attitude of customers no longer willing to support price growth.”