Liberum downgrades Jimmy Choo amid increasing competition

“We believe Choo faces increased competition in shoes as other luxury goods companies chase growth,” the broker said.

It said the speed of the luxury slowdown is notable and yet to be discounted in Choo’s consensus forecasts.

Liberum sees Burberry as a bellwether and estimates that sales in China fell from -2% in the second quarter to -11% in the third, and in the US from +8% to -7%.

In view of increased completion in the market, Liberum cut its 2015 EBIT forecast to £32.3m from £40.1m and its EBITDA estimate to £51.6m from £59.5m.

It also downgraded its second-half retail sales forecast by £4m to £108.4m given the difficult trading environment and now expects an LFL sales decline of 1.5% compared with previous expectations of 2.2% growth.

Nevertheless, Liberum said the upmarket shoemaker was well placed for the long term. “Choo’s brand strength in the US and Europe, and growing strength in Asia underpins a sound long term strategy with white space into which to grow.”

At 1110 GMT, Jimmy Choo shares were down 1.9% at 152.10p.