Coronavirus Could Cost Luxury Brands Billions

Photo: Liyao Xie/Getty Images

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Normally the goodies you get at fashion shows are small and chic — like a cashmere sleep mask or a personalized handkerchief. But at Dries Van Noten’s Paris show, guests were offered sanitary face masks to protect against coronavirus. The same day, Business Insider reported that coronavirus could cost luxury brands $43 billion in sales, according to a survey by Bernstein and Boston Consulting Group.

The billion-dollar hit is mostly because Chinese consumers make up around 40 percent (according to McKinsey) of luxury-good consumers. As stores and malls close in China, sales dry up. One former chairman of LVMH, Pauline Brown, said that 2020 will be a “disaster.” Brown also said that people may not want to buy luxury goods when they’re deeply worried about public health.

Another issue is travel. Brown said that “40 percent of luxury goods are sold to travelers.” If people aren’t traveling, they won’t be dropping thousands of dollars in duty-free Chanel stores. “We’re going to start to see a cascading effect across the industry.”

The virus has already impacted Fashion Month, where the schedule requires editors from around the world to pass through Italy — one of the centers of infection — and Paris. T magazine editor Hanya Yanagihara said on Instagram that because she went to the Paris shows, she’s been asked to work from home for two weeks as a sort of unofficial New York Times quarantine. No wonder people at the Dries Van Noten show were handing out masks. Our fashion director, Rebecca Ramsey, also noted that fewer Chinese buyers made it to Paris or Milan.

Maybe it’s time to rethink our current system of flying editors and buyers all over the world in order to make fashion decisions — a system that has already come under attack as environmentally unsustainable. Getting rid of Fashion Month might be bad for businesses, but then, so is coronavirus.

Coronavirus Could Cost Luxury Brands Billions