Quarterly Trends Report

Q2 2020: COVID-19’s global pattern of disruption across luxury brands

  • Multi Asset
  • Consumer
  • Europe

Luxury personal goods brands around the world are starting to pick up the threads after months of store closures enforced by COVID-19 lockdowns. Although there are strong signs of supply and demand recovery in China, steeper climbs are expected for Europe and the US. Meanwhile, the pandemic is accelerating a number of existing industry trends, including a shift away from wholesale to D2C, digitalisation and consolidation, experts told Third Bridge Forum in Q2 2020. As a former C-level executive at Yoox Net-A-Porter Group SpA noted, COVID-19 is proving to be “a transformational force throughout retail”.

With China having been the first to impose and lift a nationwide lockdown, a rebound in luxury spending started to emerge in the country as doors were closing in Europe and the US. Demand in Mainland China is therefore expected to recover faster than in Europe or the US — not just owing to the timeline of global outbreaks, but also because China is considered the greatest growth opportunity for luxury brands. Depending on the brand, up to 40% of global customer bases are domiciled in China. 

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