Given how much luxury brands rely on Chinese shoppers to pad their quarterly earnings, it's no surprise that executives and investors are worried.
Author:Dhani MauUpdated:Feb 19, 2020Original:Feb 19, 2020As coronavirus continues to devastate China and the lives of its citizens, luxury goods companies have begun speaking out about the health crisis — mainly in regards to how it's affecting the health of their business in the region. Kering, owner of Gucci, Saint Laurent and Bottega Veneta, announced last week that it closed half of its luxury brands' stores in mainland China and reduced hours at those that remain open.
LVMH reported its latest earnings two weeks before Kering, and executives said at the time that they expected the impact of coronavirus would pass in a few weeks. Given how much luxury brands rely on Chinese shoppers to pad their quarterly earnings, it's no surprise that executives and investors are worried. According to the Financial Times, Jefferies estimates that Chinese buyers accounted for roughly 40% of the €281 billion spent on luxury goods globally last year, but drove 80% of the growth. But what can they do about a global health crisis?
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