Personal luxury suffered from several elements of the COVID-19 pandemic in 2020. Firstly, the category experienced a significant decline in sales during the French national lockdown, during which all non-essential retail outlets closed their doors in order to curb the spread of the COVID-19 virus in France.
Even after the national lockdown measures were lifted, sales in the summer months of 2020 continued to struggle. Due to the continued threat of COVID-19 and the social distancing measures that remained in place, most consumers preferred to avoid overcrowded department stores due to the risk of contamination even when retail outlets were permitted to reopen.
Most players in personal luxury, including LVMH Moët Hennessy Louis Vuitton SA, Hermès International SCA, Richemont France SA, and Kering SA reported a significant drop in sales in 2020, which was primarily concentrated in the first half of the year. This was due to the effects of the widespread closure of retail outlets and travel disruptions.
The majority of players in personal luxury have become more pessimistic about their recovery in the forecast period with the implementation of further lockdown restrictions which have been extended into 2021. The fact that the threat of COVID-19 is expected to remain high through much of 2021 will slow the recovery of personal luxury.
“Deconsumerism” is another trend that is expected to constrain growth of personal luxury in the forecast period. Consumers, especially Millennials, are increasingly looking to consume less and consume better.
The main chance for personal luxury to recovery is in the potential for the so-called lipstick effect. Following economic crises and hard times, consumers often feel like they deserve a treat and look to indulge in luxury goods.
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Understand the latest market trends and future growth opportunities for the Personal Luxury industry in France 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 Personal Luxury research and analysis database.
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