Shuttered stores, fewer tourists: Luxury feels coronavirus effects

LONDON - Chinese tourists normally flock to Bond Street, home to some of the most expensive retail space in the world. They gather behind the velvet ropes outside the Gucci store or emerge from the flagship boutiques of Chanel and Louis Vuitton with stuffed shopping bags.

The investment bank Jefferies estimates that Chinese buyers accounted for 40 per cent of the 281 billion euros spent on luxury goods globally last year, and drove 80 per cent of the past year's sales growth in the sector, making them the fastest-growing luxury shopper demographic in the world. Despite posting robust quarterly results, Kering, owner of names like Gucci, Saint Laurent and Alexander McQueen, had seen"a serious drop in traffic in mainland China," Mr Pinault said, and a"strong drop" in global sales in recent days because of the virus.

"Luxury spending has hit a sudden stop in China, with sales either at zero for most brands or down by at least 80 per cent," said Mr Luca Solca, a global luxury goods market analyst at Bernstein."The coronavirus is likely to have a greater impact on the sector than the Sars epidemic did in 2003, given how much more reliant brands are on China and Asia for sales growth."

Given that China is the world's largest textile producer, with exports worth more than US$280 billion a year, some analysts think shortages may soon become apparent in stores, even though the fashion industry often orders goods further in advance than many other sectors, owing to seasonal collection cycles.

True! I feel that (by the reactions in real-life) the riches are afraid to die🤪

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