Japan disaster produces immediate negative effects on luxury industry worldwide

The recent international nuclear threat kindled by the dramatic explositions at several nuclear plants in Japan have added to the already negative wave of uncertainty at all levels of the worldwide econnomy. Luxury industry will likely be one of the most affected sectors, short and mid term, developments in Japan triggering a domino effect on all major stock exchanges. 

Stocks of LVMH, largest luxury conglomerate worldwide, dropped by 6,2 % on the Paris stock exchange, while PPR (owner of Gucci Group) stocks lost 6,22%. Least affected was Hermes, with a 2,29 % drop. London and Zurich provided the steepest drops for major luxury players, Burberry losing 7,03% and Richemont Group stocks dropping by 7,04%. Stocks of Swatch Group, largest international watches group registered a 6,31%. 

Uncertainty and anxiety are dominating most major international luxury markets, yet effects are likely to vary region by region and country by country, especially in the case of the major markets. Japan’s disaster not only impacts its local luxury market, which had already been suffering from the international recession but also on major countries in the regions for which Japan has been a major trade and investment partner.  We shall likely see a drop in spending across all luxury sectors , especially jewellery, fashion and travel. CPP