* Shares in Tod's, Ferragamo, Cucinelli, Moncler down
* Early broker reports for 2014 are cautious
* Luxury firms re-positioning at cost of short-term growth
MILAN, Jan 9 Shares in Italian luxury-goods
companies fell on Thursday as analysts offered cautious
forecasts for the sector in 2014, after its rapid growth showed
signs of slowing last year.
While stocks rose overall on the Milan bourse, the shoemaker
Tod's was temporarily suspended from trading after its
shares fell almost 5 percent. Luxury leather group Salvatore
Ferragamo hit its lowest level since mid-November.
Analysts are cautious ahead of the full-year reporting
season after luxury companies including Tod's, Gucci,
and Prada warned in 2013 that growth was slowing.
"We saw a slowdown in momentum in the sector in the third
quarter, and I think that's likely to have continued into the
fourth quarter," said Allegra Perry, the managing director of
luxury goods research at Cantor Fitzgerald in London.
Luxury companies are having to adjust to slower sales growth
in Asia, partly due to a government crackdown on conspicuous
consumption among public officials in China, and lower spending
by price-conscious consumers in Western Europe.
"Part of the reason why the third quarter was weaker than
expected was due to repositioning strategies, which ultimately
are likely to come at the expense of short-term growth, so it's
not just a one-quarter phenomenon," Perry said. "This may impact
on growth for some companies for at least a few quarters, in my
A Milan-based trader attributed the drop in Tod's shares to
a negative judgement from investment bank Merrill Lynch, which
reinstated its coverage of luxury stocks on Thursday.
Brokerage MainFirst downgraded Salvatore Ferragamo on
Wednesday, saying that after the stock rose about 55 percent in
2013, "we believe it is a good time to take a breather ahead of
potentially weaker (fourth quarter) reporting."
Tod's, known for its 300- to 400-euro leather loafers, is
especially sensitive to a deeper-than-expected recession in its
home market of Italy, where it makes around 40 percent of sales.
The company posted flat revenue and sales for the first nine
months of 2013, and said lacklustre results and economic woe in
Italy meant consensus analyst estimates for the full year would
be difficult to reach.
Cashmere company Brunello Cucinelli, which trades
on a price-earnings multiple almost double that of its sector
peers, fell around 3 percent in the sell-off. Newly listed
Moncler, which makes luxury down jackets, also lost
Milan's main index was over 1 percent higher on the
day at 1121GMT.