US Luxury Credit Card Spending Falls 6% in September, Third Straight Monthly Decline

US credit card spending on luxury brands fell 6% year-over-year in September, marking a third consecutive monthly decline, Citi said Tuesday, signalling further weakness in the industry's largest market ahead of the November 3 midterm elections. The drop followed declines of 4% in both July and August, according to a Citi research note based on millions of credit card transactions. Brands most exposed to the US include Tapestry, owner of Coach and Kate Spade; LVMH; and Italy's Ferragamo. Spending on leather goods and ready-to-wear improved sequentially in September, while watches and luxury jewellery deteriorated further. Citi said brands with greater exposure to higher-end consumers should remain relatively resilient, supported by equity-market wealth effects. The data follows Conference Board and University of Michigan surveys showing growing unease about the US economy. Morgan Stanley said in September the downturn leaves brands little room for a return to growth after two years of contraction, and expects weaker US demand to surface during earnings season starting October 12 with LVMH's third-quarter sales.