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What’s next? The impact of COVID-19 crisis on the luxury market

Suspension of factories in China, delays in deliveries and cancellation of fashion weeks already now have a great impact on the global economy and the fashion industry in general. Let’s take a closer look on what impact COVID-19 crisis have on the fashion industry today.
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COVID-19 and the luxury market

Prada decided to postpone the show of the cruise collection, which was supposed to be held in Tokyo on May 21. Gucci canceled their cruise show (it was supposed to be held May 18 in San Francisco), and Ralph Lauren refused to hold a show in New York, scheduled for April. The Versace cruise show in America, which was scheduled for May 16, will not take place, and Chanel canceled the May show of the Métiers d’Art collection in Beijing. Swiss watchmaker Baselworld canceled all presentations – for the first time in 102 years. It may be clear that the luxury market has been hit very, very hard by the COVID-19 crisis, just like many other industries.

Teaming up

However, on a positive note, leading fashion conglomerates decided to team up to help fight the coronavirus outbreak. LVMH and Kering donated $2.3 million and $1.08 million to fight the epidemic. The LVMH subordinate brands – Christian Dior, Givenchy and Guerlain – transformed perfume factories to the production of alcohol disinfectants for French hospitals. Kering pledged to provide French hospitals 3 million masks and respirators from Chinese suppliers. Burberry transferred the production facilities of its Castleford factory to create masks, Brooks Brothers began transforming their factories to continuously produce 150 thousand masks per day and Prada pledged to supply 80.000 overalls and 110.000 masks to doctors in Tuscany.

Anticipating on a new normal

But this is not all that fashion companies do to prevent the epidemic: many of them are helping with the medical facilities’ construction as well. According to Quartz , the luxury industry is facing its worst year, even with a greater impact than the 2008 recession. With stores around the world closed, some brands are forced to discontinue online sales to survive. But even with this, many sales, especially of seasonal items, could just be lost.

The latest McKinsey report estimates that fashion and luxury segments lost 36% in average in stock price. It also estimates the global restart for these industries not before summer 2020.
Eco-ethical credentials, fashion’s environmental impact reduction and transparency are not enough anymore, leading and emerging designers must adapt to growing pressures pivoting to the changing demands of society. Despite the bleak predictions of a future economy, a number of designers are using this opportunity to turn to digital and virtual fashion.

COVID-19 forces brands to experiment with immersive experience: virtual clothing, virtual catwalks and virtual showrooms. Brands are looking for radical ways to redefine their company’s culture to a digital realm in nowadays situation. For example, The Fabricant is using digital design tools to create a fully digital collection without wasting any material but data. They note that “what we are trying to tell is a story of fairness in combination with technology”. Likewise, Selfridges&C teamed up with 3D fashion designer Cat Taylor to create a piece of digital art.

Perhaps it’s about time that the fashion industry moves on to new areas in the field, such as 3D digital sampling and virtual fitting sessions. We probably will get used to this new normal very soon.

Also read: The true cost of the coronavirus for the fashion industry