Leading drinks and leisure companies have issued profit warnings as the long-term effects of the terrorist assault on the US begin to become apparent.
Six Continents Retail and Rémy-Cointreau are among the latest big names to warn of problems ahead resulting from the slump in the world's stock markets and the anticipated downturn in tourist numbers and consumer confidence.
Six Continents, formerly Bass, described the possible effects of the attacks as "substantial". The leisure group, which owns hotel chains Holiday Inn and Inter-Continental, issued a profits warning after analysts revised its predicted year end profits downwards from £800m to between £610m and £680m.
Meanwhile, Rémy-Cointreau chairman Mme Dominique Hériard Dubreuil warned shareholders the board "considers it prudent to revise its forecast for growth in profit on ordinary activities in the 2001/02 financial year to between five per cent and 10 per cent compared with last year.
"More than a quarter of the company's share value was lost following the announcement. Almost 40 per cent of Rémy's turnover is generated by its cognac brands, with its biggest export customers being the US and Japan."
During the recession in the US and Europe in the early 1990s, the Far East market remained strong. However, even before the events of September 11, both the US and Far Eastern economies were on the slide. Now, owners of upmarket brands face lean time ahead as consumers tighten their belts.
LVMH, the world's biggest luxury brand owner, has already revised its forecast for in the current year from a double digits improvement to around five per cent. The company owns the Krug and Moet et Chandon champagne, and Hennessy cognac brands.
The Centre for Economics and Business Research is forecasting that the UK economy will slow from growth of two per cent this year to just 1.3 per cent in 2002, while the US economy will see zero growth. The City is predicting that the drinks industry will see a 10 per cent decline in revenue as the downturn bites, while the hotel, entertainment and leisure sector faces a decline of 25 per cent.