The SARS 2003 affected the luxury goods badly, and it seems Coronavirus is going to be more worse as from buyers to manufacturers of Burberry and Gucci, everyone is being affected by Corona in one way or the other. The effects of the Coronavirus will be long even after the spread of the disease as people will still be in the aftershock.
Buyers of Gucci and Burberry are now choosing essentials over fashion, and this has made the brands are promoting sales by altering product promotion. For example, Chanel recently advertised their bath and body care range as a necessity. The fashion business is struggling to stay afloat as workers are forced to choose between their lives and livelihoods.
Luxury sales are anticipated to drop by 20 to 25 percent, and brands such as Chanel Gucci and Burberry have a huge responsibility to look after their customers.
Financial donations despite the Struggles
Luxury fashion brands have granted the healthcare frontline financial donations to help in the fight of COVID-19. For example, Gucci has made two separate donations of one million euros each to crowdfunding campaigns. One was to the United Nations Foundations Covid-19 solidarity Response fund and the other one to Italy’s National Civil Protection department. Gucci community has followed suit by posting links to crowdfunding campaigns to the Gucci website and social media pages.
Chanel, Gucci and Burberry workers
The workers of these fashion brands are putting their lives at risk for the sake of livelihood. Most retailers, due to the pandemic, are canceling completed orders leaving workers in the lurch.
Brands are now turning to the making of face masks to boost their sales in what is turning to be a terrible year for both Chanel, Gucci, and Burberry even though cashing in on face coverings has sparked a huge debate. After all, everyone will wear a face mask, so there is a need to make them fashionable.
Burberry Sales Plunge by 80%
Burberry, like other high-end fashion levels, has not been left behind by the COVID-19 as the sales in the first quarter of March plunge to 80 percent, and they anticipate sales in the fourth quarter to be 30 percent lower. Burberry shops have been closed as shopping dried up due to the pandemic. The investors’ major worry is how long the pandemic will last. Burberry has turned over its production and is now making protective gowns for nurses and doctors fighting the virus in the front line.
Chanel forecasts two difficult years
The Chanel has warned that the Coronavirus will weigh on the fashion industry for the next two years but signaled it would not change its strategy of avoiding discounting and online selling. Philippe Blondiaux, Chief financial officer, said they expect a significant reduction in revenues and profits in 2020 and the next two years. Most of the Chanel boutiques in Latin America, Russia, and the US remain closed due to quarantine measures.
The Coronavirus is expected to hit the luxury industry hard, especially the Chinese consumers who have been driving its growth in recent years.On top of everything there is also a trade war going among all countries, this also has affected the production and transportation of Chanel, Gucci and Burberry products.
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