As the world continues to endure the COVID-19 pandemic, industries further struggle to survive until the current state changes. One industry heavily affected by the unfortunate circumstances is the Fashion industry. Major luxury retailers have already began to declare bankruptcy, starting with consumer favorite Neiman Marcus.
Recently CNBC reported on the latest luxury retail report by Bain & Company in partnership with Altagamma has pointed out an unfortunate normal for the area of fashion. Titled the “Bain & Company Luxury Study 2020 Spring Update,” it details the long-term effects of the furthering pandemic. Luxury conglomerates have experienced a tailored effect from the worldwide Stay Home, Work Safe orders shutting down retails stores for weeks in counting. The report by Bain estimates that luxury sales took a combined loss of 25 percent in Quarter 1 2020, and continuing to drop into the years end. The reports estimates collective year-end sales around $195 billion to $239 billion, around 35 percent lower than 2019.
Claudia D’Arpizio, the study’s lead authors, made a statement regarding the report, “There will be a recovery for the luxury market but the industry will be profoundly transformed. The coronavirus crisis will force the industry to think more creatively and innovate even faster to meet a host of new consumer demands and channel constraints.” Which has already took a leading force with fashion houses re-thinking how they can currently get out promotions like Jacquemus and Bella Hadid’s FaceTime Campaign photoshoot. With travel and tourism a major factor in Luxury sales, the pandemic has completely dismantled travel for the time being and on the backend shattering sales across all retailers. The study is combined of a factors including brands’ ability to meet consumer needs, creatively reaching consumers in the new time, ensuring safety, economic trends, tourism and etc. The report further details that a full recovery of sales, similar to end of 2019 numbers, until 2022 or 2023.