Similarly to the majority of the sectors, luxury brands have also been severely affected by the ongoing COVID19 pandemic. According to the Brand Finance Luxury & Premium 50 2020 report, the luxury clothing market has sustained a particularly heavy impact, reaching a 20 per cent brand value loss.
However, the report wasn’t focusing on luxury apparel brands only – it's just their decrease stood up within a variety of 500 most valuable brands in the world. Altogether, the financial damage luxury sector has been estimated to drop by 1 trillion dollars.
The report has outlined three categories of luxury brands: apparel, automobiles and cosmetics and personal care. According to the analysis, neither of the categories has suffered a similar impact on another. The figures have been based on a comparison between 1st January 2020 and the date of the analysis.
For example, while luxury brands of the apparel sector have sustained the biggest losses, the automobile market is keeping up relatively well. Such brands and Porsche are still being sold in high quantities in China. Although held to be the starting point of the pandemic, China is known to have a market that manages to keep its luxury sector above the water no matter what economic situation affects the world. And thus it is predicted that soon many luxury brands will grow to depend on the Chinese market.
Not every designer apparel brand has suffered, however. Givenchy has shown extraordinary fast growth amidst the pandemic, growing its brand value by 74%.
The ability to not just stay on top of things but to move forward largely depends on the makeup division of Givenchy. Its L’Interdit perfume that was contributed to LVMH has a particularly solid and successful financial performance. Additionally, Givenchy has started developing its omnichannel e-commerce platform back in 2017, whereas many of the luxury brands had only found themselves exploring e-commerce as an option due to the physical shops being closed.
Other brands to have a good year would be Hermès, Dior, Cartier, Louis Vuitton and Chanel, all of them making to the top 10 feature. The average of their growth was approximately 14% and Gucci’s value specifically has grown by 17.63 billion dollars. The top of the list was earlier mentioned Porsche, but Gucci wasn’t far off having settled for the second position from the top.
Many luxury brands have felt the direct impact of the pandemic. However, as the figures tell us, the giants were able to withstand the challenge and come out stronger.