Bank Of America'S Latest Report Predicts That The US Market Will Recover Earlier Than Europe

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Bank of America stressed that, thanks to the re opening of luxury stores and the growth of luxury consumption in the U.S. market, luxury sales from June to July have improved significantly. "With the recovery of Macao's tourism industry, we expect growth in the Asian market," the report said. The main obstacle to luxury sales may be tourism in Europe, where the number of tourists still fell by 95% year-on-year in July. "

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"We expect the luxury industry's turnover in the third quarter to fall by only 7 per cent year-on-year," the report said Sales in June fell about 15-20% year-on-year.

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Luxury sales in mainland China and South Korea saw double-digit growth in the second quarter of this year, and accelerated in June. According to a local data in South Korea, the consumption of luxury goods in June increased by 22% year-on-year. The Japanese market was weak as stores were closed for most of the quarter. "In the third quarter, we expect [luxury] revenue in Asia to grow 13 per cent year-on-year," Bank of America said

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Due to the lack of tourism, the outlook for the European market is not optimistic, and the revenue of European luxury goods industry is expected to drop 40% year-on-year in the third quarter. Analysts also pointed out that the recovery in US market demand was a surprise. "After the blockade is lifted, we believe that the recovery in the US market will be more rapid than in Europe, as tourist consumption accounts for only 15-20% of luxury consumption."

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Analysts at Bank of America gave positive comments on the performance of LVMH group and Burberry, rated buy. Hugo boss and Kaiyun are rated underperformed.

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