Barclays analysts downgraded Adidas, Burberry and Gucci owner Kering following a two-and-half week trip to China in which they grew more cautious on the world’s number-two economy.
Analysts Wendy Liu and Carole Madjo said they went to visit brands, luxury malls, retailers, investors and other sector experts.
“The sentiment on the ground was much more cautious than 6 months ago, as there is now a clear view that the Chinese weakness is structural,” they say.
They conclude the high-growth phase of the Chinese economy is over, the finance and property sector are now under pressure and are no longer viewed as cash cows, the private sector seems to be shrinking while state-owned companies are getting larger, and the boom of the tech sector is unlikely to create as many millionaires as other sectors.