2020 Luxury Market Demand Is Still Warm.

"The first half of 2020 is a difficult period in the history of luxury goods. Many luxury brands in the world have been announced to suspend production. Some brands have postponed or cancelled their earnings reports, and the fashion industry has once again started to shake."

This week, the luxury industry is almost closed. Italy luxury car brand Ferrari and Lamborghini have announced the shutdown. Chanel, Herm s, Gucci, Rolex (Rolex), Patek Philippe, Audemars Pigeut (Audemars Piguet), LVMH group's high-end watches brand (such as Hublot), also announced that they stopped the operation of some production bases.

The new crown outbreak broke out around the world, with more than 250 thousand confirmed cases worldwide. As the heart of the luxury goods industry, Europe has escalated to the epicenter of the epidemic, and the United States shares ten days' rare four fuses, which has brought negative signals to the global economy. The fashion industry has been hit hard. This week, the major brands announced their closure and ceased production.

In addition to shutting down production, many conference activities and brand stores have also been closed down. Chanel, Gucci, Hermes and Dior announced the cancellation of the 2021 early spring series. Chanel3 on 16 May announced the closure of all U.S. stores, which will last two weeks. The company said it would continue to pay workers during this period, and Louis Vuitton closed the culture and Arts Center.

Combing the brand closure trend affected by the epidemic:

Tiffany said on Tuesday night that it would close all stores in the United States and Canada immediately. The company said it would reassess the possibility of re employment based on the epidemic situation. During the closing period, the staff will be paid normally.

In a letter to customers on Tuesday, 17, Dior3 said it would close all stores in the United States and Canada in an indefinite period. "Our priority is to participate in collective efforts to ensure the safety of all people and invite people to follow the health measures taken by the government to protect your health," the note said. The French fashion company has cancelled plans to display its cruise line in Lecce, Italy, and has postponed the joint issue of Air Jordan sneakers.

From 17 days, it will close its underwear brand Vitoria's secret, fashion brand Pink and bath brand Bath & Body Works in all retail stores in the United States and Canada until March 29th. On Thursday, it announced a notice on its website that customers had temporarily shut down their online businesses.

Capri group said on Tuesday night that it will close its brand Versace, MichaelKors and Jimmy Choo in several outlets in Europe and the United States, where the North American outlets closed in March 18th and the European outlets closed in March 19th.

On Monday 16 Levi's:3, Levi's temporarily closed all its retail stores in the US and Canada and is expected to remain closed until March 27th.

Nike announced the closure of all stores in the US, Canada, Western Europe, Australia and New Zealand until March 27th. Shops in most parts of Japan, Korea, and many other countries are open as usual.

Ralph Lauren announced that all its leisure facilities in the United States and Europe were temporarily closed, including the Polo bar in New York and the Ralph's bar in Paris.

Supreme: temporarily closes its stores, including London and New York stores.

UNIQLO parent company: XXX group decided to temporarily close its 50 stores in the US market.

Canada Goose: all retail locations in North America and Europe will be closed from Tuesday March 17th to March 31st at least Tuesday. Within two weeks, internal production facilities will be closed in Canada and the situation will be regularly reassessed.

Microsoft also said it had shut down all offline stores from yesterday to online services.

Fashion week, which is an important chain of fashion industry, also has many variables. Melbourne fashion week, St Paul fashion week, Mercedes Benz Fashion Week and Australia Mercedes Benz Fashion week have been cancelled. Shanghai fashion week launched the cloud fashion week.

The important IP level activities in the fashion industry are also seriously affected by the epidemic. Met Ball, CFDA Fashion Awards, Cannes Film Festival and Coachella Music Festival are postponed.

In March 18th, investment bank Bernstein pointed out to its customers that the first half of 2020 was the worst period in the history of luxury goods industry.

Previously, the luxury industry has been hit hard twice, including the world war and the Spanish flu in 1918. The current trend of globalization depends not only on the purchasing power of the rich, but also on the consumption driven by the new middle class. According to analysts, the new coronavirus is a challenge for the luxury industry, even worse than the recession in 2008.

Bernstein expects that in the first half of 2020, luxury consumption demand in China, Europe and the United States will drop sharply, and the collapse of oil prices will also reduce the purchasing power in the Middle East. Bernstein said in its report: "this situation is even worse than in 2008, because there seems to be no action to offset losses, in addition to some comfort from online sales".

With the economic halt effect brought by the epidemic, the financial situation of the global fashion industry is even more vulnerable.

Gucci parent Kering expects revenue in the first quarter of 2020 to drop by about 15%, and the second quarter will also be affected. Estee Lauder group announced the withdrawal of its previous performance forecast for the second half of the fiscal year, because the impact of the epidemic on its global business is gradually expanding.

Sales of its parent company Inditex group, which has declined by 24% in the year to March, slowed sharply in the first quarter of the year, falling by 24%, temporarily closing most stores in Europe, including Italy, France and Spain in the first quarter of Zara.

Burberry's recent trading volume has dropped by 40-50%. At present, about 40% of Burberry's global outlets are closed and are expected to be closed in the next few days. Burberry said in a statement on Thursday that Burberry trading fell 40% to 50% in the past six weeks due to the impact of the epidemic. The company said it is working hard to control costs and protect its financial position, including renegotiating rents, restricting travel and reducing discretionary spending.

Burberry expects comparable retail sales in the last few weeks of the year to be in the range of minus 70% to minus 80%. The current brand predicts that the sales in the fourth quarter of March 28th will be about 30% lower than that in the fourth quarter of the year.

The company said that since January 24th, the transaction has "significantly deteriorated" and comparable retail sales are between 40% and 50%. Burberry sales losses last month were mainly concentrated in the Asian market. With the reduction in the number of new coronaviruses, the mainland has begun to improve with the reopening of most Burberry stores. China is the largest market for Burberry, accounting for 40% of sales.

Right now, the biggest black swan event in 2020 has brought the grey rhinoceros incident to a halt under the global luxury industry. What kind of market plan is needed for the whole industry to adjust the strategy in time to transform the crisis and make adequate preparations for the needs of the luxury market?