Versace parent company’s sales dip shows consumers in America have soured on luxury

American shoppers aren’t buying luxury, and Wall Street analysts are getting anxious.

Capri Holdings—the parent company of Jimmy Choo, Versace, and Michael Kors—recorded declining sales in the last quarter, and shares for the corporation fell 11.3%, per Capri’s fiscal Q4 report last Wednesday, WWD reported.

“We definitely saw a sequential decline in North America,” John Idol, chairman and CEO at Capri Holdings, told analysts Wednesday on an earnings call. “We saw it first in the North American department stores, and it wasn’t just the Michael Kors piece of the business. We saw it on the luxury side as well, with Versace and Jimmy Choo.”

East bound: Idol further noted that the company saw stronger numbers and growth in Europe and Asia, and Capri is not alone in finding respite in China as American sales decline.

LVMH too reported a slump in its US numbers in April, but credited China for the overall spike in its shares in Q1, when it almost doubled analysts’ expectations. The company also noted an uptick in sales in Japan and Europe.

Likewise, Prada notched 22% growth in Q1 this year, thanks in large part to China (as well as Europre), while its sales in America were comparatively low.

Meanwhile, Burberry saw a sharp drop in its shares, which it attributed mostly to a slowdown in US sales, but still reported stronger-than-expected sales in Q4, again, thanks to China.

Overall, it seems that China is leading global luxury sales forward. While inflation may have been to blame for the slowdown in US sales, retailers have benefited from the recent lifting of Covid restrictions in China and the reopening of the country.