Optimism for luxury brands as sales in China 'bounce back'
Monday, April 20 2020
As France extended its lockdown and store closures until 11 May, there may be a silver lining for luxury brands who are seeing revenue bounce back in China.
LVMH, which last week said its second quarter would also be severely affected by the crisis, saw sales up 50 percent at Louis Vuitton stores in mainland China according to Bloomberg. L’Oréal Chief Executive Officer Jean-Paul Agon also said sales in China turned positive in March and are on track for a 5 to 10 percent gain this month.
Sales in China are coming back strong
“Our experience in China is very interesting and very telling for other parts of the world,” Agon told Bloomberg. “What we’ve seen in China is a pretty quick bounce back for the consumption of beauty products.”
Both Europe and the U.S. are at different stages of the pandemic, with retail closures across both continents resulting in the fashion industry coming to a halt in various sectors from supply chain to manufacturing to retail. China, meanwhile, has slowly reopened stores and eased travel restrictions for its citizens.
LVMH is hopeful a recovery will begin in May or June as markets return to semi normality. The French conglomerate said it has proven its ability to be resilient in an economic environment disrupted by a serious health crisis that has led to the closure of stores and manufacturing sites in most countries in recent weeks, as well as the suspension of international travel.
LVMH’s fashion and leather goods groups, which include the Maisons Celine, Dior, Fenty and Givenchy, saw rapid growth in online sales in the first quarter. Elsewhere it recorded a decline a 10 percent decline due to store closures in the majority of regions around the world.