In the aftermath of the natural disasters in Japan last weekend, the luxury retail world is trying to prepare itself for some major backlash. Stocks, including Tiffany, Coach and Polo Ralph Lauren, were included in a global sell-off as investors predicted the demand for luxury goods in the wake of the tragedy would drop significantly. And as they predicted, money was lost almost immediately as Burberry shares fell 4.3 percent, LVMH dropped 3.1 percent, Coach lost 5.6 percent and Tiffany fell 4.9 percent.
Japan consumes 11 percent of the world's luxury goods, making it one of the most concentrated sources of revenue for upscale brands. A pullback there could affect sales of high-end retailers for years, analysts told The New York Post. Tiffany has 55 stores in Japan and gets 19 percent of its revenue there, while Coach relies on Japan for 20 percent of its total sales.
To add to all the damage that's already been done, there is still the impending fear that a nuclear meltdown could occur after the damage to Japan's nuclear plants was deemed unstable. Because of this, nuclear energy firms around the globe have also been affected, with stocks from Entergy, General Electric and Toronto's Cameco falling as much as 13 percent and causing countries like Germany to cancel their expansion of nuclear reaction sites.
Overall, the nation's investors lost more than $285 billion in the first trading day after the natural disasters. There's no way yet to tell how far the economic ripple will extend from the Japan disasters, but Andre Bakhos, chief market analyst at Lek Securities told The New York Post, "The earthquake could have great implications on the global economic front. If you shut down Japan, there could be a global recession."
Article Source: The New York Post
Photo Source: luxuryblog.orgSee the Top Ten Summer 2016 Trends for Women Over 40