26/06/2020
Due to China’s lock-down the luxury fashion market has been heavily affected. However, some of the effects might not be what you expect.
Although China is the greatest creator of goods for the global economy it is also one of the largest consumers of goods, especially luxury goods.
LVMH one of the world’s largest luxury groups and owner of Louis Vuitton, counts on China for a massive 30% of its yearly revenue and therefore was excepted to take a huge hit in revenue in February when lock-down took full effect in China.
However, after China began lifting its lock-down in March an interesting social phenomena occurred. The wealthy within the Chinese population actually started revenge buying luxury brands as a response to being forced to stay quarantined during the peak of the outbreak. This resulted in a large uptick of sales for the luxury brand market with brands such as Hermès reporting sales of 2.7 million dollars in one Saturday.
This increase in sales after the lock-down was lifted could massively help to make up the loses that luxury brands have suffered. In addition large luxury brands also have a bigger profit margin which allows them to get through the crisis will less impact.
What is your favourite luxury goods brand? Let us know below.
