From the Wall Street Journal Europe's The Source blog:
The fall back in European luxury stocks Monday is an obvious and understandable reaction to the crisis in Japan, which accounts for almost a quarter of luxury demand.
But the frothy valuations of many European luxury goods companies is unlikely to come off the boil long term, as the pendulum of demand swings towards China and the spectre of consolidation at attractive multiples looms.
Shares in most of the European luxury goods companies fell between 2% and 5%, including LVMH (MF Global estimates its sales are 9% exposed to Japan ), Richemont (11% exposure), PPR (around 5% exposed) and Hermes (19% exposure). Burberry, which MF Global says has 5% exposure to Japan, was hardest hit, falling more than 5%....MORE
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