Hermes was one of the major luxury brands which took very firm action to shut down its production sites as well as some of its stores shortly after French authorities gave indication of the unprecedented aggravation of the Coronavirus spread and its higher and higher number of deaths.
Once the situation normalises, will Hermes lose its desirability or it will face any shortages, for instance, in procuring raw materials of the same standards? No. Hermes even runs its very own crocodile farms. Will their unique innovative edge be affected? The answer is simply no. Maybe sales growth will slower, but in the long term, the brand will not have been impacted by this crisis.
Customers will also appreciate the trust and reliability they can place in Hermes which makes no compromises whether it is the quality of its products or its no-discounts or outlet sales policies. One of the biggest strengths of Hermes is preserving all the metiers (craftsmanships) and investing in the education and training of its artisans. Such a firm approach can only vouch for the importance Hermes places on the safety and wellbeing of all its employees.
Hermes is also non-dependent on any major events such as Paris Fashion Week, its ‘shows’ being an effortless illustration of the latest trends, finest fabrics, craftsmanship and innovations.
Rolex also shut down all its production and has alarmingly signalled dramatic declines in sales, worst in decades. That is because the desirability of the brand in the past two decades has been predominantly anchored on massive advertising campaigns, sponsorships of major golf and tennis sports events. In many emerging markets less traveled and educated rich consumers only buy Rolex because of how recognisable the shape of the watch is from a distance, a key show-off factor – many being completely unaware of the craftsmanship behind the case. The biggest early blow came when annual watch exhibition Baselworld was cancelled. Traditionally Rolex not only occupies the largest space but it also boast a design of millions of euros.
Iconic luxury watch Maison Patek Philippe made no announcements on whether it will adjust production or whether it will apply restrictions to its retail network, instead posting a most brief text message on shutting down temporarily its Instagram page, as a matter of respect. Like Hermes, Patek Philippe will be less affected by the coronavirus. Its brand DNA, the story it tells and the desirability of its products is purely driven by performance and innovation, deeply rooted in heritage. Patek remains secretive about how many pieces it produces in a certain amount of time – the opposite of Rolex whose ‘leaked’ figures are the talk of the industry.
Patek does not sponsor and like Hermes has no ‘brand friends’ or ‘brand ambassadors’ and does not offer any products on barter. Its advertising is timeless with a clue line saying one does not actually own a Patek, instead, safeguarding it for the next generation. As for major exhibitions, the lack of a stand at Baselworld will surely have no impact at all on the brand.
All the major top luxury hotel groups should have shut down their properties, instead of taking even the smallest risk to endanger guests, employees and local patrons. No matter ‘restrictions’, ie closure of dining outlets and obliging guest to have any meal in-room dining will only show weakness.
Brunello Cucinelli, Loro Piana, Moynat, Goyard, Delvaux, Tod’s, Roger Vivier, Gaziano Girling, Balenciaga, Givenchy, Celine, Saint Laurent, Giuseppe Zanotti, Christian Louboutin, OFF White – are among the luxury brands which will most likely rebound faster.
Louis Vuitton, Prada, Chanel, Burberry, Armani, Moncler, Valentino, Michael Kors, Coach, Jimmy Choo, Ferragamo, Versace , Balmain, are among the luxury fashion brands which may face a tougher ride on the recovery path once the Coronavirus will have been contained – already before the outbreak of the coronavirus some of these brands had been reporting weak financials financials.
Jewellery may see a bigger negative impact especially when it comes to pieces that are more often designed by season. Timeless pieces (heritage pieces reinterpreted) and smaller iconic pieces (non seasonal) may be gradually rebuilding desirability. Bvlgari and Tiffany&Co may be best prepared, considering their wide range offerings, including dedicated men’s lines.
Most probably, spending will be more driven by the investment factor, i.e. more classic style pieces that may be worn regardless of trends and seasons. The quality of the materials will also play a bigger role – exotic skins, cashmere, silk etc.
When it comes to luxury hotels, iconic properties such as The Dorchester in London, Le Bristol Paris, Beverly Hills Hotel, Raffles Singapore, The Peninsula Hong Kong, Burj Al Arab, Sacher Hotel Vienna, Park Hyatt Moscow, Bulgari Hotel Milan, Mandarin Oriental Barcelona or The St Regis New York, The Langham Chicago, Belmond Copacabana Palace have been striving to constantly push themselves beyond boundaries, having earned and secured the loyalty and praise of their guests thanks to their consistent service standards. Besides an inhibition in opting for upper scale accommodations and shorter stays, the impact will be relatively moderate.
Luxury properties of this calibre are certainly not as heavily dependant on the cancelled or postponed trade fairs / exhibitions such as ITB, IMEX or ILTM. Many luxury hotel groups already organise dedicate sales trips with their own teams.
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