“I don’t think anyone really understands how high prices will be everywhere, in restaurants, in cars and everything else,” Friedman said, adding that this increase will hurt all consumers and that companies like his, will find themselves in a “complex space”.
Other companies that cater to more affluent consumers are also starting to warn that worrying headlines could hurt demand.
Larsson added that the company “will continue to grapple with the pandemic’s ongoing headwinds, in particular supply chain and logistics delays, especially in North America, in addition to recent virus outbreaks in Asia.”
But some Wall Street analysts remain optimistic that luxury companies will continue to do well.
“Luxury brands should benefit as they are likely to retain pricing power to maintain high margins, and they could see growth if international travel returns to pre-pandemic levels,” said Zachary Warring, an analyst at CFRA Research.
Fears of a severe slowdown in US growth may also be exaggerated.
“We don’t believe the gloomy scenario for luxury goods yet,” Erwan Ramburg, head of global consumer and retail research at HSBC, said in a report last week. “We are surprised to hear some talk of a sharp decline in U.S. sales scenarios, given continued evidence of good appetite for luxury brands.”
“The only market for which we expect the growth slowdown to be slightly noticeable is mainland China,” Rambour added, noting that Covid-related lockdowns could hurt luxury demand there.
But Ramburg also did not rule out that the global market and the economic downturn will eventually affect luxury sales. In the report, he said that a recession, a sharper fall in share prices and a protracted conflict in Ukraine are key risks facing high-end consumer companies.