It is understood that the BNP Paribas Luxury Goods Research Department released a report five years ago called “Ten Crisis in the Luxury Industry”. In order to show the profound impact of China’s consumer market on the world, it described it as ” If China sneezes, the global luxury goods market will get pneumonia.” Unexpectedly, five years later, global luxury goods manufacturers are suffering the impact of the new coronavirus. As the new coronavirus pneumonia epidemic continues, luxury goods Some markets have temporarily closed their Chinese stores. Even though some stores are open, the number of customers has dropped significantly.
The GUCCI brand fashion of the French luxury goods group Kering has always been characterized by high-end, luxury, and Famous for being sexy. With the outbreak of the epidemic, Gucci said it suspended production activities in Italy and closed the factory for eight days until March 20. However, the work required for the business continued to be carried out and did not affect the supply of products to customers. It also postponed the 2021 early spring series conference originally scheduled to be held in San Francisco, USA on May 18. Suppliers under the Kering Group also revealed that Gucci’s handbag order volume in February was only about half of January’s, and there were no orders in March.
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Burberry is A luxury brand with a strong British traditional style, it is understood that about two-fifths of the Burberry Group’s sales come from Chinese consumers. The company issued an official statement stating that it has suspended operations of about one-third of Burberry stores in China, and the traffic of some stores that are still open has also dropped by 80% year-on-year. Therefore, Burberry has also withdrawn its full-year performance forecast for 2020.
At the same time, Burberry’s 2020 Autumn and Winter Burberry men’s and women’s fashion show originally scheduled to be held in Shanghai on April 23 may be cancelled, and the Shenzhen social retail store in exclusive cooperation with Tencent will also be delayed. Open for business. It is understood that Tapestry, the parent company of Burberry, Ralph Lauren and Coach, all unanimously stated: “In view of the current trends in the Chinese market, we expect that the performance in the second half of the year will be affected by approximately US$200-250 million.”
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Canada Goose is very popular among Chinese people for its excellent functionality, fashion and good reputation. . Due to the outbreak of the novel coronavirus pneumonia, Canada Goose stated on February 14 that the epidemic has had a substantial negative impact on the company’s performance, and the passenger flow and purchase rate of China’s offline retail stores and online e-commerce have also dropped sharply. , as the epidemic gradually spreads around the world, international shopping malls and retail stores in North America and Europe are also affected.
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Fashion products and fabrics are one of the most important industries in Italy. Every year Total sales reached 90 billion euros. At the same time, Italy is currently the most severely affected area by the novel coronavirus pneumonia epidemic. As of March 17, Italy has had a total of 27,980 confirmed cases, and there are currently 23,073 confirmed cases, which shows how serious it is.
Salvatore Ferragamo, from Italy, is one of the world’s leading designers of leather shoes, leather goods, accessories, clothing and fragrances. It is understood that in the fiscal year ended December 31 last year, Salvatore Ferragamo’s sales increased by 2.3% year-on-year to 1.37 billion euros, of which sales in the Asia-Pacific region increased by 1.1% to 510 million euros driven by the Chinese market. However, revenue in the first quarter of this year may be reduced by one-third compared with the same period last year, which is obviously affected by the closure of stores in some areas due to the epidemic and the delay in the release of new series of products.
Prada’s revenue in China previously accounted for more than 20% (as well as Burberry 23% and Hermès 25%). These world’s top luxury brands are increasingly inseparable from the fertile soil of China. . However, the sudden epidemic brings uncertainty. Prada can only temporarily close some stores of its brands in mainland China and Macau, and will postpone the first resort series show originally scheduled to be held in Japan on May 21. To make matters worse, the Italian government has implemented a nationwide lockdown on the 10th to prevent and control the new coronavirus. The locations of many luxury brands and suppliers such as Prada, Armani and Versace are also suffering.
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According to Reuters interviews with some Italian fabric and leather product suppliers According to the report, many people said that due to the impact of the epidemic in the Chinese market, many brands had begun to reduce the number of orders long before the government issued the lockdown ban, and the outbreak of the local epidemic in Italy made it even worse for them.
According to predictions by Boston Consulting Group and Bernstein, the valuation of the Italian luxury goods industry fell to 309 billion euros, a five-year low. This year, the industry may face a decline of 30 to 40 billion euros. Lost sales.
According to Jefferies analyst Flavio Cereda, Italy is the most important supplier of the luxury goods industry. Due to the epidemic, the Italian luxury goods industry is also not allowed to Do not face the situation of order cancellation or reduction. His second��The sales forecast for the luxury goods industry in 2020 has been lowered from the previous “increase of 1%” to “a decrease of 3%”.
He also added: “If the supplier’s business is affected by the epidemic for a long time, it may further affect the supply chains of major brands in the future.” Recently, he also said that this The epidemic has undoubtedly sounded the alarm for the luxury fashion industry’s over-reliance on Chinese consumers, and is expected to cause losses of about 12 billion euros to the industry. Reduced consumer desire in China has led to reduced tourist numbers, widespread store closures and supply chain disruptions. These are problems that the luxury fashion industry urgently needs to solve.
Why the luxury market can be easily hit hard by the outbreak of the new coronavirus? Some investors believe that the main reason is that luxury brands will place most of their investment in China. Inland market. According to data from Bain & Company, one-third of global luxury goods sales come from China. Last year, the growth rate of the Chinese market reached 30%, and 90% of global growth was driven by Chinese consumers. Since the outbreak of the epidemic, the stocks of luxury brands have been plummeting, and some have had to adjust their financial forecasts for this quarter and even the whole year, and have issued profit warnings. Some industry insiders pointed out that since the epidemic has not yet been resolved, many places will choose to extend the rework time. The usual model of starting production in February and delivering orders in April may be postponed to May or June. Luca Solca, a global luxury goods market analyst at Bernstein, pointed out: “China’s luxury goods consumption suddenly hit the pause button, and the sales of most brands were either zero or at least an 80% drop.”
As for whether luxury brands can try online e-commerce, according to the “China Business Daily” report, Prada has moved online on February 24 and opened a flagship store on Tmall. It is currently in the trial stage, but there are only more than 10,000 fans (the current survey is about 20,000). Consumer Ms. Wang told reporters that for luxury goods that cost more than 10,000 yuan, even if it is the brand’s online flagship store, she will have concerns before purchasing, and she will feel more at ease when seeing the real thing. It shows that the characteristics of luxury goods still determine that they are more suitable for physical retail.
After the epidemic is over, can offline luxury goods consumption pick up?
Although the epidemic is sweeping the world and may have an unstoppable trend, most industry insiders are still optimistic about the future. They believe that the luxury goods business will achieve a retaliatory rebound next year. , and achieve the goals before the epidemic. According to consulting and research firm Agility Research, as China’s epidemic has been effectively contained, China’s luxury retail seems to be turning a corner, and physical retail traffic is slowly rebounding. Of the 11 stores previously closed by Hermès, only two have not yet resumed operations. All in all, the epidemic can only suppress consumption in the short to medium term at best. After the catastrophe, retaliatory carnival consumption will be released. As the poster released by Louis Vuitton on the official social media platform on February 7 said: “Press the pause button. The journey will eventually start again.” </p
