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Luxury

Which brand did Covid-19 affect most – Louis Vuitton, Dior, Gucci or Hermès? Luxury houses’ results show a turnaround in the second half of 2020

STORYRichard Lord
Luxury houses had a difficult first half of the year, but their fortunes have improved markedly in the second half – particularly in China where the country has largely recovered from the effects of Covid-19. Photo: Bloomberg
Luxury houses had a difficult first half of the year, but their fortunes have improved markedly in the second half – particularly in China where the country has largely recovered from the effects of Covid-19. Photo: Bloomberg
Fashion

Richemont, owner of Piaget, Chloé, and Panerai; Bottega Veneta’s parent Kering; and Prada show a similar pattern of steep declines in the first half against 2019, then a levelling off

This has been a truly challenging year for all sorts of businesses – that hardly needs restating – and luxury brands are no exception. A pandemic is going to be tough for luxury goods when the global political and economic climate is unclear and there’s less disposable income around.

However, luxury products have the power to bring a jot of much needed happiness to people’s lives. This seems to have cushioned the businesses behind them, with green shoots of recovery emerging in recent months.

Here’s how some of the top luxury companies – including Louis Vuitton and Dior owner LVMH, Gucci’s mother ship Kering and watch giant Richemont – have fared financially this year.
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Hermès

A model presents a creation by Hermès during the Paris Fashion Week’s women spring/summer 2021 ready-to-wear show on October 3, 2020. Photo: Xinhua
A model presents a creation by Hermès during the Paris Fashion Week’s women spring/summer 2021 ready-to-wear show on October 3, 2020. Photo: Xinhua
It was a positive third quarter for Hermès, with sales up by 7 per cent driven by 12 per cent growth in the brand’s stores, including a 29 per cent rise in Asia excluding Japan. Revenue to the end of September amounted to US$5.24 billion, down 14 per cent, after a fall of 24 per cent in the first half of the year, including 41 per cent in the second quarter. After an early drop, the company’s share price has risen consistently throughout the year, finishing on 859 euros (US$1,047), up from 671 euros.

LVMH

A Louis Vuitton store at Ion Orchard Mall on Orchard Road in Singapore, in July 2020. Photo: Bloomberg
A Louis Vuitton store at Ion Orchard Mall on Orchard Road in Singapore, in July 2020. Photo: Bloomberg
Like many, the tale of LVMH, the world’s largest luxury group, has been one of a dramatic drop followed by a gradual recovery. The company’s revenues stood at US$36.9 billion for the first three quarters of 2020 after being down 27 per cent year on year in the first half, but then only down 7 per cent for the third quarter, meaning a 21 per cent drop over the three quarters. (Then again, it did report record results in 2019 driven by the stellar performance of Louis Vuitton and Christian Dior.) LVMH’s share price began the year at 419 euros and ended it at 499 euros, receiving its biggest bump when the company’s acquisition of jeweller Tiffany & Co. was completed in October after nearly a year of wrangling.