For weeks now, a new post-Covid-19 era has been heralded by the media and social networks and even by all those people who like to meet up online for happy hour. They’re calling it “the world after” and it will be a world built on greater solidarity and a stronger sense of social responsibility, where financial gain is no longer the top priority. Utopians can hardly contain themselves, and are shouting from the rooftops: degrowth is just around the corner! But in fact, they’re wrong – it’s already here. According to the International Monetary Fund (IMF), the global economy will shrink by at least 3% in 2020, and leave rampant unemployment and bankruptcy for thousands of companies in its wake.
In this grim scenario, where does luxury stand? Containment strategies have already caused a tidal wave of closures of boutiques and workshops in the sector. But recover it will. Some experts predict a broad shift to online sales. But the latest updates from the LVMH group on the Chinese market are hardly bearish on sales in physical stores: the 15% drop in the first quarter of the year was followed by a growth in sales in April that at times exceeded 50%.
This was the case for Louis Vuitton, the group's powerhouse. This rush to the boutiques clearly indicates that the desire to consume is even stronger after two months on lockdown and that the sector can make it through this crisis. This is also confirmed by the latest study by Bernstein and Boston Consulting Group, which predicts that the time needed to wake from the stupor of a world at a standstill, and for clients around the world to realize they want to go back to living the way they used to, will be only seven months. That’s how long they say it will take for the luxury market to regain its cruising speed and get back to exactly where it was before.
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