How has the coronavirus crisis hit luxury retailers?
Here are some of the UK and US companies in the sector to have recently updated on reopening plans and on how Covid-19 disruption has impacted trading so far:
Last month the FTSE 100 company revealed that revenues in the year to March fell 3% to £2.6 billion and comparable sales dropped 27% in the fourth quarter.
Burberry, led by Marco Gobbetti, pointed to some encouraging signs since the financial year end as different countries ease restrictions, and said in May that sales since the start of April in mainland China and Korea were ahead of the prior year.
As at May 22 around 50% of the British fashion firm’s 421 sites were still closed. More details here: https://tinyurl.com/yacxaw9n
As branches reopen a number of social distancing protocols will be in place at Burberry, including split shifts for staff and limiting the number of customers in stores at all times.
The firm will also offer virtual client appointments for those who would rather not travel to shops.
Like rivals, the bag maker had to shut stores during the lockdown. In an update this week Mulberry said that the digital sales performance at the business has been good, but that cannot fully offset the decrease in demand experienced from store closures.
In Mulberry’s update this week, the company said it expects the recovery in its overall sales levels over the medium term to be gradual. But it cautioned social distancing measures and reduced tourist and footfall levels will impact revenues even once stores reopen.
The upmarket manufacturer has launched a consultation process on proposals to reduce employee numbers by around 25% across the global business.
Mulberry plans to commence a phased reopening of some of its UK stores, with health and safety measures in place, on June 15.
It has been able to reopen stores in China and South Korea and, more recently, some in Europe and Canada. More details here: https://tinyurl.com/ycqcm6ms
Tiffany & Co
The US jeweller this week said net sales in the three months to April 30 were lower than a year earlier primarily as a result of the temporary closures of a “substantial number” of the retailer’s stores around the world due to the Covid-19 pandemic.
New York-headquartered Tiffany, known for its diamond engagement rings, said in the first quarter worldwide net sales declined 45% to $556 million (£438.71 million) and comparable sales were 44% lower.
Currently around 80% of Tiffany's stores are open globally and it has continued to gradually reopen sites in line with guidance from governments.
Although it was impacted by shops shutting during the lockdown, it saw first quarter online sales improve 23% globally, with the UK figure up 15%. More details here: https://tinyurl.com/yb6d5mgn
In an update on May 28, John Idol, chief executive of New York-headquartered Capri Holdings, which is behind brands such as Jimmy Choo and Michael Kors, said: "The Covid-19 pandemic has profoundly impacted our lives and our business in ways we could not have anticipated.”
The company said it has begun to resume store operations globally in accordance with local government’s reopening plans. As at May 28, slightly more than half of its stores were open.
In its Europe, the Middle East and Africa division, all Versace, Jimmy Choo and Michael Kors locations closed in mid-March. Almost 60% of the 318 retail stores in the region are open and Capri anticipates the majority will be open by early July. It said sales at reopened stores are approximately 50% of prior year volumes since reopening, as compared to the same period last year.
It also updated on Asia and US reopening plans, and said it had seen good online growth. More details here: https://tinyurl.com/y85npj97