The Luxury Fashion Industry Has Already Recovered From the Pandemic

It kind of goes without saying at this point, but the pandemic hit everyone hard. Some, admittedly, harder than others – but, nonetheless, from restaurants to movie theatres to small-time creators and artists, seemingly endless lockdowns and a sense of shifting priorities made their presence known to pretty much everyone in one way or another.

And, to that end, the luxury fashion industry – despite its obvious position of privilege – was not immune to the consequences of a world in crisis. In fact, in November 2020, the personal luxury goods market was revealed to have contracted for the first time in over a decade – a drop of 23%.

And yet, fast forward eight months down the line, and we find a very different story. Heralded by the more-or-less return of Milan Fashion Week and then the announcement from Chanel of a half-year revenue that climbed by double digits – enough to put the brand on track for twelve-month profit margin equal to its pre-pandemic numbers – it feels like we’re looking less at an industry in dire straits and more at an industry determined to come out swinging.

If that seems premature – well, maybe. But Chanel isn’t an outlier here: LVMH – the parent company of such household names as FENDI, Louis Vuitton, Dior, Givenchy, and far too many others to list – saw a decline in revenue of 16% in 2020. But, in May 2021, Bernard Arnault – the group’s chairman and CEO – overtook Amazon’s Jeff Bezos and Tesla’s Elon Musk on the Forbes’ list to officially become the world’s richest person, thanks to what writer David Dawkins calls “a pandemic-defying performance by his luxury group.”

And, while rich people getting richer isn’t exactly news, the fact that Arnault’s wealth jumped from circa $76 billion USD in March 2020 to a little over $186 billion USD around a year later, in this unprecedented climate, really is staggering.

Elsewhere, Capri Holdings – the parent of Versace and Jimmy Choo, among others – looks to be feeling equally optimistic, projecting an overall annual profit exceeding Wall Street expectations.

Basically, things are looking good for luxury.

Still, you have to wonder: will it last? A bounce of some kind with a return to any degree of normality was always to be expected. When people started to go out again in public and, even more unthinkable a year ago, to travel internationally, clothes, shoes and accessories were always going to be a priority for the kinds of people readily able to do those things without hesitation.

But, for Capri, a big part of that boost was an 80% rise in ecommerce sales during the fourth quarter of 2020 thanks to heavy investment in online retail infrastructure in lieu of traditional retail space. For LVMH, too, the necessary pivot to online during the pandemic has helped defy expectations: Vogue Business, “I was forecasting the share of online to decrease on a group-wide basis, particularly in fashion and leather goods, when things normalise. It’s not happening at all to be frank.”

In a sense, these are all the right noises. In the 2020s, online sales really should form a solid component of any brand’s revenue. More than this, digital stores – like digital fashion weeks – are a more modern, more democratic way of doing business; they allow for a whole new group of consumers to enter the fold. Shoppers who might have the disposable income to buy designer goods, but who – realistically – only have that cash to spend at the expense of the kind of free time that in-person shopping requires. Investment in e-commerce is, essentially, acceptance of the idea that luxury isn’t only for the ultra-wealthy.

And therein lies the problem. These progressive attitudes – with which fashion can so often be found toying, flirting without intention – are the product of necessity, not desire: a change made because it was required in order to keep the numbers up. Not because it represents some shift in the industry’s deeply-ingrained, deeply exclusionary way of thinking.

Like digital fashion presentations, focus on direct-to-consumer e-commerce could so easily be part of a swathe of positive changes in fashion. Also like digital fashion presentations, though, it seems inevitable that these initiatives will be sidelined in favour of the old ways as soon as humanly possible. As Guiony says himself, in the eyes of the luxury industry, “nothing replaces the store visit.”

And, sure enough, as long as this kind of thinking persists at the highest levels then it will remain true. A kind of self-fulfilling prophecy. Luxury, after all, isn’t a volume business – or, at least, in order to thrive it can’t be perceived as one: value comes from scarcity. From inaccessibility. From desire. Being able to satisfy all your luxury fashion needs at the click of the button just doesn’t play into that narrative.

So, while it seems likely that – as long as the world continues to open up once again – all the numbers will realign and stabilise. Profits, as they were before the pandemic, will continue to grow – although at a much steadier rate than they have over these last few months – and shareholders will be happy.

But, with that return to normality, we’ll also likely lose something: a chance to do things better.