A 2020 Makeover for The Luxury Fashion Industry
The luxury fashion industry has been hit hard by the Covid-19 outbreak. Flagship stores and warehouses across the globe have been forced to temporarily close, while several landmark events in the fashion calendar are cancelled.
And with approximately half the world’s population under some form of lockdown, combined with widespread job cuts, designer clothing may not be many people’s priority for some time. Will the market be able to keep up its appearance?
How have luxury fashion brands responded so far?
Fashion houses around the world are responding to the pandemic in different ways – and it may not all be bad news.
The likes of Gucci and Saint Laurent have announced plans to abandon the fashion calendar’s traditional four seasons of production and shift towards creating fewer, more considered collections. As well as giving designers more room to breathe, it’s hoped that doing so will help slow the current pace of fashion consumption.
In Paris meanwhile, the tentative reopening of various high-profile stores suggests the luxury shopper experience could be reinvented.
Customers are now making online appointments for private, socially distanced tours delivered by the designers themselves.
A market reliant on China recovery
Despite some causes for optimism, the market’s Q1 losses cannot be ignored. Luxury conglomerates responsible for brands including
Balenciaga and Louis Vuitton have reported significant drops in revenue – which many analysts are attributing to lockdown in China. Chinese consumers account for a higher percentage of luxury purchases than any other nationality. Yet stores have been closed across the country and advertising pulled for much of 2020 so far.
A shrunken Chinese economy and reduced Chinese tourist travel to global fashion hotspots is bound to result in reduced spending in the short-term. While China’s economic recovery is expected sooner than most, luxury brands may need to look elsewhere to re-establish their financial position.
Why Taiwan shouldn’t be overlooked
Investors monitoring global markets with online brokers such as Tickmill may already have an eye on Taiwan’s increasingly high-performing economy.
Separated from China by a short distance over sea, the island nation has a thriving textiles industry and is home to the manufacturing operations of many international fashion brands. Its economy is growing at a faster rate than many of its Asian counterparts. Yet its super-rich consumers remain underestimated – despite already spending more on luxury goods than those in higher profile states such as Qatar.
The luxury fashion market would do well to turn its attentions to Taiwan in an effort to recover post-pandemic.
