Image Credentials: Image Title: Luxury Retail Hit Hard by Trump Tariff Bombshell Source: AI-Generated Image (AI ChatBox) Date: April 2025 Attribution: Created by AI-generated imagery (AI ChatBox), and it does not depict a real-world scene.
💼 MARKET SHOCKWAVES
Shares in Burberry and Watches of Switzerland Plunge Amid Investor Concerns
By Staff Writer with Agencies
London, April 7, 2025
High-end retailers Watches of Switzerland and Burberry saw their share prices tumble today following President Donald Trump’s sweeping tariff announcement, as fears mount over the future of British luxury exports to the United States.
Watches of Switzerland led the sector’s losses with a staggering 15% drop in share value, while fashion powerhouse Burberry saw its stock fall by nearly 7%.
“There are heavy losses for the luxury sector,” said Kathleen Brooks, research director at XTB. “Investors are still seeking out areas of safety, including utilities, real estate, healthcare, and consumer staples.”
Trump’s new trade policy includes a 20% tariff on goods from Italy and an additional 31% tariff on imports from Switzerland, countries central to the supply chains of both British luxury brands. Switzerland was named by the president as a “serial abuser” of American trade, with the US registering a CHF 38.5bn (£33.9bn) trade deficit with the nation last year.
According to analysts at RBC Capital Markets, the “elevated tariff impact” on Burberry is directly tied to its sourcing mix — a blend of international suppliers that includes a specialist outerwear factory in Italy and a scarf production facility in Scotland. With the US accounting for 20% of Burberry’s revenue, the blow is especially painful, as the American market was the only region to report year-on-year sales growth in the company’s latest results.
Meanwhile, Watches of Switzerland’s exposure to the US market and comparatively low profit margins make it particularly vulnerable to rising costs. The luxury watch distributor may face difficult choices: absorb costs, raise prices, or restructure supply chains.
“In response, companies can either raise prices, change country of origin (to the extent possible), renegotiate supplier terms… or absorb tariff costs,” RBC analysts noted.
There is growing concern that luxury brands may pass some of these costs onto US consumers, potentially driving up prices and softening demand in a crucial retail market.
Despite the turmoil, some market watchers say this may only be the beginning of broader structural changes in global luxury trade. “This shake-up could accelerate long-term shifts in sourcing and supply chains,” said Brooks.
The UK luxury industry, represented by trade group Walpole, has yet to formally respond but is expected to seek clarity from officials on potential exemptions or compensatory measures in the coming days.
As the tariff tremors continue to ripple through the markets, industry players and investors alike are bracing for more volatility ahead.
Staff Writers at Open Chronicle produce in-depth, field-informed reporting on defense, diplomacy, cultural transformation, and global affairs. Known for clarity, accuracy, and analytical depth, they connect breaking developments to broader historical and strategic contexts. In addition to frontline journalism, Staff Writers also contribute to the Open Chronicle Encyclopedia, crafting authoritative entries that preserve critical knowledge and enrich public understanding.