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Tuesday, April 07, 2020

Coronavirus dims spotlight on fashion industry’s big month

Some brands have had to cancel shows because of quarantine measures.

By: Bloomberg | Updated: March 2, 2020 3:01:00 pm
coronavirus, fashion, Bloomberg, Indian Express news People exiting the Metro Station wearing protective masks to counteract the possible infection of the coronavirus in Duomo square, Milan, Italy, on February 24, 2020. (Photographer: Francesca Volpi/Bloomberg)

Fashion weeks in New York, London, Milan and Paris — where the luxury industry shows off its fall womenswear collections at runway spectacles and showrooms for buyers — have been taking a hit from precautions to stem the spread of the coronavirus.

Some brands have had to cancel shows because of quarantine measures. Those that chose to keep calm and stick to the schedule had to do so without the usual number of Chinese models, buyers and celebrity spokespeople whose social media posts and wholesale orders are key to promoting trends in the industry’s most important market.

Milan Fashion Week started to unravel on its final day Sunday, as a surge of infections in the surrounding Lombardy region led to new quarantine measures. Michael Kors canceled the launch event for a 007-themed collection at the behest of local authorities, while Giorgio Armani live-streamed videos of his show from an empty theater, having asked guests not to come the night before.

“The decision was taken to safeguard the well-being of all his invited guests by not having them attend crowded spaces,” an Armani spokesperson said.

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Shoppers from China accounted for more than a third of luxury purchases and two-thirds of the industry’s growth in recent years, and concerns over the coronavirus’s spread are weighing on the sector. A Bloomberg index of luxury goods companies has fallen more than 10% year-to-date as Chinese spending on products including perfume and leather handbags grinds to a halt amid quarantine measures.
Luxury companies’ global sales may be 6% lower than previous forecasts this year, on average, with companies heavily exposed to China suffering even more, according to Luca Solca, an analyst at Sanford C. Bernstein. He described 2020 as a probable “gap year” for the sector, saying further cuts may be needed if the viral spread accelerates.

In Paris, where Fashion Week begins Monday evening, industry powerhouses including LVMH’s Dior and Kering SA’s Saint Laurent are forging ahead, albeit on tenterhooks.

“We’re listening to the recommendations of health authorities and will share them with brands in case of any epidemic in France,” said a spokeswoman for the FHCM trade group that organizes Paris Fashion Week’s schedule.

Asian Brands

Several Asian brands, including Taiwan’s Shiatzy Chen, canceled their Paris shows weeks ago, foreseeing insurmountable difficulties in safely transporting staff and products.

“We think it is the most appropriate action after deep thoughts and considerations,” Shiatzy Chen’s chief executive officer, Harry Wang, said in a statement.

The majority of brands have managed so far to show their womenswear collections as planned –including Burberry Group Plc in London, and Prada SpA and Kering’s Gucci label in Milan. But they’re likely to suffer from lower visibility because of the absence of Chinese participants, as well as difficulty selling the collections to retailers who can’t come in person.

Chinese retailers still want to order products to stock their stores later this year, anticipating that the virus’s spread will diminish with the arrival of warmer weather. Without being able to touch the products, though, managers may be less sure what to order.

“We can place our orders from a distance when it’s a brand we already sell, since we already know the cuts and the material,” said Yiling Hong, the founder of a Shanghai fashion boutique and matcha cafe called Canal Street. “It’s too much of a risk to try new brands.”

Dedicated Teams

Larger labels with dedicated Asia merchandising teams will probably fare better this season than smaller ones, which may struggle to reassure buyers, she said.

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In New York, the estimated value of online posts about fashion week by Asian celebrities and influencers fell 75% from the previous year, fashion data consultancy Launchmetrics estimated, losing more than $10 million worth of media exposure. European fashion weeks are seeing a significant drop in coverage led by Asia as well, Chief Marketing Officer Alison Levy Bringé said.

Brands might recuperate some of the lost publicity by delaying, not canceling, their ad spending — as Kering CEO Francois-Henri Pinault says his brands plan to do. Still, they’ll probably have to plan new events to generate excitement, rather than promoting images from a months-old fashion week.

“When people get back to shopping, brands are going to need to get really creative,” Bringé said.

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