The Covid-19 pandemic will contract the luxury sector by up to 35%

The luxury industry closed 2019 globally with a growth of 4% to 1.26 billion euros.

The life of affluence has also been drastically changed by the economic impact of the coronavirus pandemic. In the midst of this global crisis, luxuries have been relegated to second place.

The luxury sector could fall globally by up to 35% by 2020 compared to 2019, although this fall could be less, around 20% or 25% if elite tourism, which is “key” to moving the whole sector, is activated and strengthened, according to the Fortuny Circle.

Tonik
Photo: Tonik

This commercial decline is due to the drop in consumption and in the availability of extremely shallow or ornamental items for sale to the public, which has been restricted as part of the isolation and confinement measures imposed by the Spanish government and many other governments around the world.

In an interview with the EFE agency, the recently appointed president of Circulo Fortuny, Xandra Falcó, has bet on “excellence” in the luxury sector and has said that “there is a long way to go since only 13% of international travelers who come to Europe visit Spain and tourism for the luxury sector is key and fundamental in moving everything: shopping, hotels, restaurants.

The luxury industry closed 2019 globally with a growth of 4% to 1.26 billion euros. This drop represents 1% of the European Union’s GDP and barely 0.1% of overall GDP.

Top-of-the-range cars grew by up to 7%, reaching 550 billion Euros, personal goods – such as jewellery – rose by 4%, to 280 billion Euros, and premium drinks and wines turned over 5% more, to 76 billion Euros, according to a report by the sector’s business association.

Therefore, not all of the luxury sector has been affected, but for the most part the trade shock has been quite recessive for the industry.

According to Falcó, “everything predicted that in 2020 the trend would be the same, and this industry would grow between 3 and 4%, but with the crisis generated by the coronavirus, growth has stopped and it is not known if it will recover, so that the fall in sales in the luxury sector could reach up to 35%”.

Author: Mundiario