What will the Luxury industry look like post coronavirus.
For the past few weeks I have been following several articles, opinions from analysts, industry experts and most of them are certain of a paradigm shift in the way luxury businesses operate and consumers consume. The pandemic has caused every industry, every individual to stop, rethink about their habits and choices.
As per this Bain & Company article
* In the first quarter of 2020, we predict that global luxury sales will suffer a year-over-year decline of 25% to 30%, although there are signs of recovery in China.
As the coronavirus first surfaced in China and China being the major market for luxury brands
“Asia suffered a significant sales decline, with China at the forefront of the negative trend.” – Bain and Company
When the coronavirus hit major luxury cities and countries, basically where most of the luxury brands headquarters are placed. Luxury conglomerates did what is expected from them. Be a pioneer and use their resources to help respective governments in overcoming in the shortage of medical supplies. LVMH mobilised their facilities to produce sanitizers. Designers turned their workshops in manufacturing masks and other medical supplies.
Supply & Demand
Chanel, Hermes, and Louis Vuitton and many others, have shut down production and store closures of their luxury goods. Hence as and when things resumes certainly there will be some lag time to fire up the production. Capri Holdings Ltd. which includes brands like Michael Kors, Versace, Jimmy Choo will keep its stores shut until June 1.
As Patrizio Miceli, head of creative agency Al Dente highlighted in an interview given to wwd – “Luxury brands have a phenomenal global cultural aura that goes way beyond products. You might not be a customer of a given brand, but you might still like its philosophy and brand culture.”
Overall I feel there will be a definitive divide, there will be a section of luxury users who will cherish their existing luxury goods, bring out the forgotten pieces from the corners of their closet and there will be another section of affluent consumers who will want to invest in new collections.
Slow paced and a seasonless approach,
I can pick at least three to four luxury items from my closet which were a fad and now look dated not because of the design but because of this fast paced, insta trends we follow, trendy pieces cloaked in the name of ‘new arrivals’. While this should not be the case with luxury since luxury is more than a fad, Luxury is an experience, a labor of craftsmanship, luxury is about experience, heritage.
Fashion Weeks – There are two major Fashion weeks, Fall Winter and Spring summer fashion weeks happening in February to March, the other from September to October. Besides this there is a Menswear Fashion Week, Paris Couture Week which also takes place twice a year, Resort aka Cruise shows. Other than the big 4 fashion weeks there are hundreds of fashion week happening around the globe.(check here for detailed list of all the fashion weeks)
While Giorgio Armani cancelled his show at Milan Fashion Week 2020, even with the coronavirus threat looming, the Paris Fashion Week went ahead without any changes. A.P.C founder Jean Touitou quoted in a recent interview to Tim Blanks “My ideal would be one fashion week a year.”
With such strong reactions coming from the industry its high time the schedules of Fashion week need to be reworked.
Luxury brands have always been the pioneers and have decided the trends which have eventually trickled down. I expect luxury brands to make some tough and definitive decisions towards sustainable, conscious and responsible fashion.
What exactly is luxury in times of a Pandemic…
Right now sitting at home on your very comfortable couch is a luxury, social distancing while working from home is a luxury. In a time of isolations and lockdowns being independent and self sufficient is a luxury.
My article is focussed on the luxury fashion industry which is just a part of the luxury industry in whole. How this pandemic is going to affect the entire luxury service industries is something we have to wait and see. If this topic interests you I am linking a few a articles which I used for my research and are a in depth study of this topic.
Updated 17th May
French luxury house Chanel is raising prices across the globe on its iconic handbags and some small leather goods, according to Reuters.
Chanel said the price increases in euros ranged between 5% and 17% ; the price of a Louis Vuitton bag has risen by nearly 14 per cent.
“The price adjustments only regard Chanel’s iconic handbags, 11.12 and 2.55, as well as Boy, Gabrielle, Chanel 19 bags and certain small leather goods,” Chanel said in a statement to Reuters.
Luxury brands are dealing with even bigger challenges, during the COVID-19 crisis, halted manufacturing plants to store shutdowns, and poor first-quarter performances. COVID crisis
is not just a crisis of demand but also supply.
How does the loyal luxury customer base reacts to this in terms of buying is something we will see in the coming months.