Significant disruptions to major events in the luxury calendar, store closures and market freefall have reinforced the setbacks the industry is facing due to coronavirus2020欧洲杯体育足彩外围app, or Covid-19. Over 82,000 cases have been confirmed worldwide, with 2,814 deaths and 33,270 confirmed recoveries. This is how it has affected the luxury market so far:
On February 28, the team behind Baselworld announced the world-leading watch show has been 'postponed' from April 30-May 5 this year to January 28-February 2, 2021. A statement was issued following an official ban on large public gatherings by the Swiss federal and cantonal authorities. The ban also prompted the cancellation of the Geneva International Motor Show.
Michel Loris-Melikoff, Managing Director of Baselworld said, “we deeply regret having had to postpone the event due to the coronavirus, in full consideration of the needs of the watch and jewellery industry to be able to benefit from the platform to develop their business. By postponing the show to January 2021, we have found a solution that enables the industry and all our customers to avoid losing a full year."
2020欧洲杯体育足彩外围appThe event is the biggest in the horology calendar, and global watch brands rely upon it to showcase their annual offerings and entice clients; the cancellation of this year's fair will have a profound impact on profits.
On February 27, there was an announcement cancelling the fair, which hosts leading brands like Hermès, Cartier, Montblanc and Piaget, and was set to take place in Geneva April 25-29. The statement read, "The Foundation de la Haute Horlogerie in Geneva has been monitoring the situation linked to the spread of the COVID-19 with the official health bodies. In order to protect the health and wellbeing of the visitors the decision has been taken to cancel the 2020 edition of Watches & Wonders Geneva."
The first cancellation to be confirmed was Swatch Group’s Time to Move showcase in Zurich, debuting the 2020 ranges of watches from its brands including Omega, Blancpain and Harry Winston. When it was called off earlier this month because of the coronavirus it was slightly unexpected, but now it now proves to be a decision that was ahead of the curve.
On February 27, a communication from , stated that the event, which was initially due to take place April 21-26, has been postponed to June 16-21. The release said that this was due to "the necessary health precautions related to the COVID-19 outbreak."
Earlier that week,, the Milan Furniture Fair, was also postponed from and to the same dates. The team behind the event released a statement saying, "following an extraordinary meeting today of the Board of Federlegno Arredo Eventi, and in view of the ongoing public health emergency, the decision has been taken to postpone the upcoming edition of the Salone del Mobile Milan to 16th – 21st June."
It went on to read that the decision was 'strongly supported' by the Mayor of Milan, Giuseppe Sala, and that this was a 'major show of responsibility.' These announcements all come after Milan Fashion Week, which ran from February 18-24, and was laced with confusion and indecision, with some shows going ahead and others cancelling.
The city is the capital of the Lombardy region in northern Italy where tens of thousands of people have been quarantined having tested positive for the virus. The Lombardy and Veneto regions combined have seen as many as 50,000 cases so far, with a death toll of 229.
On Sunday February 23, Giorgio Armani cancelled his autumn/winter 2020 show, choosing to send out a filmed version instead. “The decision was taken to safeguard the wellbeing of all his invited guests by not having them attend crowded spaces,” read the brand's press release. At the same time, Michael Kors cancelled its 007 special event which was due to take place that night.
Before fashion weeks in New York, London, Milan and Paris began, however, luxury labels were already feeling the pinch. British label Burberry announced on Friday 7 February that it was to close 24 of its 64 mainland China stores. Reports also suggested that almost a quarter of US companies in China expect revenues to take a minimum 16% hit this year due to the spread of the virus.
Over 78,000 cases of the virus have arisen in China so far. Being the second largest luxury goods market in the world, this looks set to have a knock-on effect on the brands who rely on Asian spending power. The protests in Hong Kong have already sent tremors through the market, but the coronavirus has the potential to become a global threat.
2020欧洲杯体育足彩外围app"The outbreak of the coronavirus in mainland China is having a material negative effect on luxury demand," Burberry's CEO Marco Gobbetti said. "While we cannot currently predict how long this situation will last, we remain confident in our strategy."
2020欧洲杯体育足彩外围appMeanwhile, Capri Holdings, which own brands such as Versace, Jimmy Choo and Michael Kors, has shuttered 150 of its 250 mainland China stores, while Ralph Lauren has closed half of its 115 stores. Sports titan Adidas has temporarily shut a ‘considerable number’ of its 12,000 Chinese stores, it has been reported.
Thehas reported that global aviation stocks have fallen just 1.6 per cent, on average, since January 23, when many Chinese provinces began reporting Coronavirus cases.
There has been a global effort to reduce as much international travel to and from the region as possible, with the Foreign and Commonwealth Office advising against all but essential travel to mainland China (including Hong Kong and Macao) and all travel to the Hubei Province, where the outbreak has broken out. Other regions the office is currently advising against visiting are: Cambodia, Iran, northern Italy, Japan, Laos, Malaysia, Myanmar, Singapore, South Korea, Taiwan, Thailand and Vietnam.
2020欧洲杯体育足彩外围appNews also broke earlier this month that Art Basel Hong Kong, Asia’s largest art fair which was due to take place mid-March, has been cancelled. The fair traditionally attracts around 90,000 visitors from the world over, including some of the world’s biggest art galleries, auction houses and collectors.
CEO of MCH Group, the event management company that runs the fair, Bernd Stadlwieser said, “the decision to cancel Art Basel Hong Kong was an extremely difficult one for us. We explored every other possible option, including postponing the fair, and gathered advice and perspectives from many gallerists, partners, and external experts. However, today, we have no other option but to cancel the fair.” Art Basel will be refunding galleries 75% of the stand fee.
It is not the first time that the luxury market has felt the effects of a health epidemic. In 2002-2003 during the global SARS crisis, which emerged in China, the global economy reportedly suffered a $50bn hit2020欧洲杯体育足彩外围app. China’s GDP growth slid from 11.1pc year on year in the first quarter of 2003 to 9.1pc in the second quarter.
But in 2020, China is a far bigger luxury market than it was back then and for many brands it's their bread and butter. This week, the FTSE dropped to its lowest since 2016 with loses in shares of almost £5 trillion worldwide. With a growing number of cases the extent of the impact remains to be seen, and while profit and loss are low priority compared to the human toll, the industry is stealing itself for turbulent times ahead.
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