Luxury’s Post-Pandemic Future
This week, everyone will be talking about LVMH’s post-pandemic outlook at its annual meeting, the start of Ramadan and BoF’s Professional Summit on closing fashion’s sustainability gap.
- LVMH reports first-quarter financial results on April 13 and holds its general meeting on April 15.
- The owner of Louis Vuitton, Dior and dozens of other brands typically sets the tone for the rest of the luxury industry each earnings season.
- The US and China, luxury’s biggest markets, are booming, though whether that will translate into surging sales remains to be seen.
There’s less clarity than usual about how luxury’s biggest brands have fared so far in 2021. The industry is likely to see strong economic data out of the US and China translate into booming sales from its two biggest markets. But lockdowns across much of Europe can’t be good for business. LVMH will release first-quarter results on Tuesday, and with a global presence in ready-to-wear, leather goods, beauty and hotels, its outlook will set the tone for competitors. The latest report will be followed soon after by LVMH’s annual shareholder meeting on Thursday, an opportunity for executives to give a detailed outlook for the coming months and, occasionally, to make some news. Last year, CEO Bernard Arnault predicted a gradual recovery from the pandemic, setting expectations low for what turned out to be a surprisingly robust rebound for the conglomerate’s brands. The normally bullish Arnault is unlikely to be quite so circumspect this time.
The Bottom Line: One area to watch is LVMH’s travel retail business. Air passenger volumes are rising rapidly in the US and some other countries, but it’s not yet clear whether the international shopping trips that are so important to global luxury brands are making a comeback.
RAMADAN, REIMAGINED
- Ramadan, a month of prayer, fasting and spiritual reflection celebrated across the Muslim world, begins this week.
- The holiday, and particularly its closing Eid-al-Fitr festival, is typically a major source of business for fashion brands in Muslim-majority nations.
- Net-a-Porter, Shein, Farfetch and Zalora are among the e-tailers producing special edits or collections for Ramadan.
Last year Ramadan, which rotates around the calendar based on the lunar calendar, happened to fall in late April when global lockdowns were at their strictest. Sales from what was normally the Muslim world’s biggest shopping event of the year were effectively wiped out. In 2021, fashion brands and retailers are hoping to make up for lost time. They just might: Dubai’s malls have been open since last summer, and the emirate, along with nearby Bahrain and Qatar, has been among the world’s fastest at vaccinating its population. Retailers who depend on the “Ramadan Rush” of Muslim tourists arriving to the UK and other destinations are out of luck, however. And some of the largest Muslim-majority countries by population, including Indonesia, have been slower to roll out vaccinations.