Fashion and accessories are discretionary industries by nature and deemed non-essential by most consumers. Therefore, the onset of the COVID-19 pandemic resulted in sharp declines in sales of luxury leather goods in 2020.
Luxury leather goods suffered greatly in 2020 as a result of the COVID-19 pandemic, which forced retailers to close their stores and caused tourism to come to an abrupt and damaging halt for luxury brands and retailers. The abrupt disruption of international tourism, especially wealthy Chinese travellers, caused a significant decline in sales of luxury leather goods for retailers and brands that relied heavily on the spending power of these consumers.
Luxury leather goods brands and retailers will have to become better at catering to the tastes of local consumers who increasingly want brands whose values and practices they identify with, and who value sustainable objectives in their path to purchase. Prada Australia Pty Ltd, for example, introduced a new collection, Prada Nylon, in mid-September 2020 in limited stores worldwide.
Despite unprecedented declines for the luxury leather goods category in Australia in 2020, this category is likely to rebound over the forecast period at a faster rate than other luxury good categories, as lifestyles return to “normal”. Indeed, constant retail value sales are expected to recover to pre-COVID-19 levels by 2022.
Sustainability issues and animal rights remain key for Australian consumers. Certainly, PETA (People for the Ethical Treatment of Animals) is urging the fashion industry to abandon using leather and consumers to reconsider their fashion choices that contain animal products.
Despite huge declines in luxury spending overall, one channel that has seen impressive growth is that of luxury resale. As the lifestyle changes and economic uncertainty caused by the pandemic have made consumers think more about the long-term value of a fashion item and viewing luxury goods spending as a form of investment; not only will consumers be looking for longer-lasting items but also those that are unique, or limited edition.
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Understand the latest market trends and future growth opportunities for the Luxury Leather Goods industry in Australia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Luxury Leather Goods research and analysis database.
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