The global pandemic has called for curfews, lockdowns, and social distancing across the world. People are advised against stepping out of their homes, let alone go shopping. And in such a scenario, the luxury fashion vertical is the worst hit. Brands across the globe are facing a dip in sales -one that is collectively estimated to total at $600 billion.
In revising its forecasts, consulting firm BCG stated that luxury sales are expected to drop between $85 and $120 billion in 2020, up from its first $40 billion forecast, with the fashion and luxury category alone losing between $450 and $600 billion. In comparing the crunch to the financial crisis of 2008, Javier Seara – BCG’s global sector leader for fashion and luxury said, “The previous recession was not a consumer crisis, but a financial crisis,” He further added, “What we are living through right now is more deeply and drastically on a human dimension, it has to do with existential anxiety more than financial anxiety.”
In addition to online and direct sales, tourism buying fashion are also expected to take a hit as traveling in countries will continue to be curtailed long after. A silver lining though is the recovery of the Chinese economy and their re-stated demand for luxury goods. Consumers in the Asian country have already begun shopping and are expected to make a majority of luxury consumption in the coming months. Whether or not brands will be able to match up the demand with an equivalent supply though is for time to tell!
[Via: Vogue Business]
