LIVE MARKETS-Luxury: Berenberg says keep selling the rallies

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LUXURY: BERENBERG SAYS KEEP SELLING THE RALLIES

The key message from Berenberg's latest take on luxury is straightforward: investors should not be tempted by recent gains because the sector's problems are structural, not cyclical.

The German bank argues consensus remains too optimistic, with forecasts assuming the industry will return to its historical 6-7% sales growth rate within months.

Berenberg instead believes a much weaker 2-4% growth over the next two to three years is "more credible", weighed down by a prolonged slowdown in China, pressure on aspirational consumers and softer demand from Gen Z shoppers.

"Our strategy remains simple: sell the bear market rally," analysts Nick Anderson and Vani Mohindra write.

Berenberg argues downgrade risks remain high as investors underestimate the depth and duration of the sector's headwinds.

(Danilo Masoni)

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