This article is from the WeChat public account: Hua Xia Times (ID: chinatimes) , author: Zheng Tingting, Huangxing Li, formerly titled” big cut-off store began, luxury “grabbed the throat”: Q1 China sales are expected to decline by 40% “, the title figure comes from: IC photo
“Upstream production is suspended. We have not yet received the latest notification of changes in the goods. However, although the production of foreign factories is suspended, it will not affect domestic prices. It will be updated every quarter, mainly imported from France and Italy However, customs declaration takes time, so spring and summer models and autumn and winter models will be available. “A Dior store sales guide told the China Times reporter on March 24.
Due to the spread of the global new crown pneumonia epidemic, luxury brands such as Chanel, Hermes and Gucci have announced the cancellation of fashion week and the closure of factories. Recently, the reporter visited a number of luxury stores in Beijing, and the staff said that the stores have not been affected by the suspension of foreign factories, and the new rhythm and prices remain normal. However, due to the reduced number of customers affected by the epidemic and the global supply cut-off, the performance expectations of the luxury goods industry and related retail companies are quite pessimistic. Apart from stores in China and other regions, it remains unclear whether luxury brands can find new online retail space on a global scale.
Exhibition and production are suspended abroad, and the domestic spring and summer models are normally updated.
On March 22nd, Kering France announced that its luxury brand Balenciaga (Balenciaga) and YSL (Yves Saint Laurent) plans to switch to medical protective masks. At present, the mask production qualifications of relevant factories have passed the verification of relevant departments. Previously, worldwideThe largest luxury goods group LVMH also announced that its brands Dior, Givenchy and Guerlain production lines in France will produce disinfectant hand sanitizer.
According to incomplete statistics, Chanel has closed production bases in France, Italy and Switzerland; Hermes also announced the temporary closure of 42 factories in France until the end of March. Rolex closed factories in Geneva, Bill and Chrise; Gucci announced the closure of its six factories in Tuscany and Marche, Italy. Gucci stated: “Important business activities will continue, and the temporary closure of the factory will not Influence brands to supply products to customers. “
On March 24th, a reporter from China Times visited luxury stores located in areas such as Xidan and Financial Street in Beijing. In a shopping mall, the reporter noticed that although it was a working day, many people still went shopping , LV, Burberry, Dior and Gucci stores also have customers to buy, but the number is not large.
The staff of the Gucci store told reporters that it is currently being updated every week. Although the customers are not so diligent as a whole, these days the passenger flow is much better than before. And many customers choose to communicate and purchase on WeChat. Dior store related staff also told reporters: “We will also release new season in the circle of friends, customers in need will order online, we help mail.”
Furthermore, according to a shopping guide at a Burberry store in Beijing, he told reporters: “After the closure of foreign factories, the main brands affected are Italian factories, and Burberry’s factories are in the UK. At present, the stores are less affected. The frequency is four times a year. At present, the spring and summer models have been completed. ”The staff at the LV store also expressed a similar statement:“ After the shutdown of foreign factories, it has not affected us at present, and the pace of the new is still normal. Passenger flow every day There will also be specific sales figures that are not easy to disclose. “
“ The suspension of foreign luxury goods actually affects the market and price of Chinese luxury goods. On the one hand, China’s luxury goods sales have stagnated, but its prices will not be too great It is possible that the shrinkage of China ’s consumption will continue to rise. Because the Chinese people ’s consumption habits and psychology have recovered quickly after the epidemic. Both the consumption scene and the use of luxury goods have tended to normalize. Therefore, the suspension of production abroad has actually affected China. The market is good news. “Zhang Peiying pointed out to a reporter from China Times.
Negative earnings expectations
After canceling major fashion weeks and closing stores, the epidemic has further impacted the luxury goods industry. forFor luxury brands, the performance of the first quarter of 2020 has been severely affected.
A few days ago, Burberry announced that in the past six weeks, about 40% of stores have closed. Brand sales have fallen by 40% to 50%, with a decline of up to 80%, and it is expected that it will decline further in the future. Burberry CEO Marco Gobbetti said: “The company is trying to cut costs, including seeking to reduce landlord rents. With the company’s abundant asset support, we are taking relief measures to control costs to maintain financial conditions.”
The Kering Group has also publicly stated that due to the impact of the epidemic, its revenue for the first fiscal quarter of the new fiscal year ending March 31 is expected to fall by 13% to 14% over the same period last year. The second quarter results are expected to be more severely impacted.
“Although the luxury industry has been greatly affected by the epidemic, unlike many small and medium-sized enterprises, production will be closed for three months. Luxury products will also have the impact of sales pressure, but the brand itself is indestructible. It is not fatal Hit. The scarcity of the brand and the brand itself have formed barriers in the minds of consumers. This is the biggest difference from ordinary companies. The luxury industry has created a high taste attribute and positioning. This is their There are many reasons why the ability to resist risks is stronger. “Zhang Peiying told the China Times reporter.
According to the European Investment Bank’s forecast, with the spread of the new crown pneumonia epidemic, global luxury sales will decline by an average of 8% in the first quarter, of which the Chinese market will plummet by 40%. Especially for Hong Kong, a shopping paradise, luxury goods, as the biggest profit in its retail industry, saw the steepest decline in sales. Data released by the Hong Kong Census and Statistics Department show that in January 2020, the value of luxury goods such as jewellery, watches and clocks, and valuable gifts fell 41.6%.
Chow Tai Fook, the only Chinese brand among the world’s top ten luxury groups, also disclosed that its sales in the first two months of 2020 were close to being cut. All along, Hong Kong’s business locations contributed more than 30% of Chow Tai Fook’s revenue; the well-known Hong Kong retailer Salsa International previously released the latest sales data for Hong Kong and Macau during the Spring Festival from January 25 to January 31, 2020. During the period, salsa retail sales fell by 76.9% year-on-year, and same-store sales fell by 75.5% year-on-year.
“Conducive to current inventory sales”
“The online self-operated shopping malls for luxury goods in Europe and the United States are the main direction. They do a better job of protecting intellectual property rights and brands. The starting point is mainly branding. And many e-commerce companies in ChinaStaying at the sales stage, luxury brands have limited decentralization of e-commerce platforms, so China’s true vertical e-commerce and brand independent e-commerce development is not very good. Luxury brands bring their own traffic, and self-built e-commerce is their main consideration. “Zhang Peiying, an adviser to the China Luxury Alliance, told the China Times reporter.
After the factory ceased production, for the luxury goods company, it also disrupted the new rhythm of the brand. It is reported that at present, the summer products of luxury brands have been completed in the domestic market, and the short suspension of European factories will not have much impact on domestic seasonal supply. At the same time, if demand in the Chinese market picks up, brand re-allocation of inventory to China may reduce losses and reduce inventory backlogs.
In Zhang Peiying’s view, the suspension of production in foreign factories is partly due to the impact of the epidemic and the supply chain cannot keep up. On the other hand, it is good news for existing inventory, because the slowdown of the new pace is conducive to the current inventory sales. But for future development, including this winter and even next spring, there will be faults. But the impact will not be great. Because luxury goods have different loyalty and industry attributes, everyone will continue to wait and pay attention.
In the Chinese market, when retail companies ’offline store sales are blocked, it has become a trend to go online. It is no exception for luxury brands. Affected by the epidemic, on March 20th, the Armani Group ’s important luxury brand, the official flagship store of Giorgio Armani Tmall, opened. Prior to this, the Armani brand has successively had a number of sub-brands such as Emporio Armani and Armani Exchange The cat opened a shop. Since 2020, many brands such as Cartier and Prada have gathered on Tmall to open stores. LVMH not only opened the Tmall flagship store, but also launched a Valentine’s Day limited-time store on WeChat Mini Program. In addition, due to the large-scale absence of Chinese stars, KOL, buyers and other fashion weeks this season, many brands also try to live broadcast Milan Fashion Week and Paris Fashion Week online.
At present, all Gucci stores in Italy will be closed until April 3. At the same time, Gucci also said that customers can still visit the official website for support and services. The reporter found that Dior, Hermès, LV and other overseas official websites can now be purchased normally. Among them, LV and Hermès’ online shopping malls are distributed in major countries in the Americas, Asia, Europe and Oceania, and are currently focusing on new spring and summer 2020 women’s clothing. However, the specific sales are not displayed on the official website. Dior’s online malls are mainly located in Europe, China and Japan in Asia and Brazil in the United States.
For the impact of the suspension of production at foreign factories on sales in the domestic market, the reporter repeatedlyDialing the official telephone numbers of Chanel, Gucci, Hermès and Kering Group, and related personnel of Hermès told reporters that the company has not completely resumed work and implemented a shift system. The staff responsible for related matters have not yet arrived. In addition, calls such as Chanel Gucci and Kering Group were not answered.
In Zhang Peiying’s view, to understand the issue of luxury brands doing online shopping, we must consider the original intention of the brand and some of their own characteristics. Brands have their own traffic, and sometimes there is some overlap between user portraits and e-commerce platforms. But brands have more say, so self-built e-commerce in the future is their most important consideration. And the cooperation with the platform e-commerce is only as an auxiliary, or in the early stage of exploration, the future focus of luxury products must also be mainly brand e-commerce.
This article is from the WeChat public account: Hua Xia Times (ID: chinatimes) , author: Zheng Tingting, Huangxing Li