TheChek News Flow

This week, everyone will be talking about LVMH's assessment of the pandemic's impact, the prospect of extended lockdowns in the US and UK, and China's economic recovery. Get your BoF Professional Cheat Sheet.

LVMH reports first-quarter financial results on April 16

The owner of Louis Vuitton, Celine and other brands said in late March that it expects Covid-19 to cut Q1 sales by up to 20 percent

The luxury conglomerate initially downplayed the coronavirus threat but has since taken drastic steps to address the crisis

LVMH, the luxury conglomerate turned hand sanitiser and face mask manufacturer, reports results this week. The company has undergone a remarkable transformation since its last financial update in January, when executives downplayed the risk of Covid-19. ("Do you know how many people die from the flu every year?" one executive said on an analyst call before floating the idea that the then-nascent crisis "won't be that bad" if it passed in a couple months.)

LVMH had changed its tune by late March, predicting a 10 percent to 20 percent drop in Q1 revenue compared with the same period in 2019. Last week, Louis Vuitton started making hospital gowns at its ready-to-wear atelier, an admission that life won't be returning to normal anytime soon (while also making it easier to restart regular production once the pandemic subsides).

The tone LVMH strikes on Thursday will be closely watched, as will any insight into how quickly China is rebounding. (Louis Vuitton's stores in that country had all reopened by last week, though it's not clear if sales have fully rebounded to pre-outbreak levels.) In an interview with BoF, Louis Vuitton Chief Executive Michael Burke declined to offer a date for normal production to resume, though he did indicate work is underway on future collections.

The Bottom Line: All brands can do is wait out the pandemic. LVMH, with its enormous scale and pile of cash, is better equipped to do this than virtually any other company in fashion.