Market & Topical Perspectives

The Luxury Industry in the Pandemic Era

The Luxury Industry in the Pandemic Era

Traditional retail businesses had struggled for a decade to overcome the competitive challenge of online sales and were already weakened before the impact of Covid-19 began to be felt in 2020. Within months of the pandemic’s arrival, some long-established department store chains slipped into bankruptcy

Key Takeaways

  • Key-Takeaway

    Covid-19 dealt a serious blow to the luxury goods industry, which had been experiencing steady growth for more than two decades, driven in part by rapid consumer market development in China

  • Key-Takeaway

    While the large multi-brand conglomerates that dominate the sales of personal luxury goods were not immune to the pandemic’s effects, we think such companies are likely to withstand the pandemic’s dislocations and emerge on the other side in even stronger competitive positions.

  • Key-Takeaway

    We believe global incomes and wealth should resume their upward trajectory once the impacts of the pandemic recede. This includes emerging markets, where China is not the only country with an expanding middle class.

  • Key-Takeaway

    Consumer trends—particularly among millennials— suggest the issue of sustainability may be increasingly important for the makers and sellers of luxury goods.