A weaker yuan is a direct threat to the growth hopes of Europe’s top luxury brands. It will force investors to take the sector’s over-dependence on China more seriously.
European luxury stocks have fallen 7.5% since Friday morning, according to an index of 10 luxury names compiled by Heard on the Street. The wider Stoxx Europe index is down just 4%. The declines follow a period of remarkable resilience: Heard’s luxury index is still up 24% year to date, despite tensions between the U.S. and China.
