People go shopping at a mall in Hong Kong, May 3, 2020. (Photo/China News Service)
(ECNS) -- Affected by the global COVID-19 pandemic, the once prosperous luxury industry has gone from summer boom to chilly winter as many luxury stores remain shut across the world.
LVMH President Bernard Arnault, the richest man in Europe, has lost $30 billion during the coronavirus pandemic, more money than any other individual in the world, according to Bloomberg Billionaires Index.
LVMH is an epitome of the luxury industry, which is set to contract between 20 percent and 35 percent in 2020 globally, Bain & Company estimated last week.
While major world economies are still facing a recession due to lockdown, consumers in China, a market that accounts for over one-third of luxury sales and two-thirds of the sector's growth in recent years, started dominating luxury purchases.
LVMH said it saw sharp sales acceleration in the Chinese mainland during April as consumers flock back to stores.
"In April, for the large brands, we've seen very high growth rates in mainland China,” LVMH Chief Financial Officer Jean-Jacques Guiony said. "It really shows the appetite of Chinese people after two months of lockdown to come back to their previous pattern of consumption.”
Other luxury goods consuming countries like Italy and France are set to remain under lockdown until at least early May.
To weather the crisis, LVMH raised its prices in May, adjusting them in China, the United States, Canada, Australia and other markets, by about 5 percent to 9 percent.
Some luxury brands have turned to e-commerce and live-streaming to weather the storm.
In March, Giorgio Armani, a luxury brand owned by Armani Group, opened its official flagship store on Tmall, an e-commerce platform under Alibaba Group. Cartier, Prada and other luxury brands followed suit.
"As consumers slowly emerge from lockdown, the way they see the world will have changed and luxury brands will need to adapt," said Paolo Misurale, Bain & Company partner and leader of the firm's Asia-Pacific consumer products practice.
