The Coronavirus, a (deadly) respiratory disease, is also affecting the luxury and watch industry. Reason being? Nowadays Chinese customers are responsible for 33% of the value of luxury goods purchases (as per FT.com). It doesn’t take much imagination to figure out what happens when that very market is getting locked down.
The Coronavirus is attacking the luxury industry from multiple fronts. The obvious one is that domestic sales will certainly suffer. In addition, a chunck of the massive New Year sales will certainly have been affected. Finally, due to less Chinese consumers travelling abroad this will also affect international sales. The charts are already visible slipping.
The above chart shows the Swatch Group, LVMH, Kering and Richemont Group. Hard to argue with the charts in this case.. With the virus yet to get under control this is likely only the beginning of a larger drop.
For anyone with questions related to the Coronavirus, please have a look here for more information. Don’t panic and be safe out there.