Leather goods perform well. Specifically, Hermès, Dior, Louis Vuitton and Prada all do well. Less, but still positive for Gucci. That’s what the sales estimates prepared by analysist for the last quarter of 2020, following the Christmas season, is showing. The Christmas take-off though isn’t the same thing as an immediate recovery for the luxury segment. That being said, the same analysts show uncertainty towards a quick recovery for 2021. The near future will, nonetheless, be fertile ground for mergers and acquisitions”.
Christmas take-off
While waiting for quarterly sales results for the end of 2020, analysts publish their forecasts. Thomas Chauvet of Citi, told Vogue Business not to expect the general situation to be very different from that of the third quarter, so a general downward trend and only a few brands in the green. According to Morgan Stanley, LVMH’s fashion and leather goods’ sales should increase by 13& in the last quarter of 2020, mainly thanks to Dior and Louis Vuitton. Hermès should grow by 8.1%. Richemont will also grow by around 8%, thanks to the performance of the jewelry department. Kering, on the other hand, will be in the red. According to the bank, excluding eyewear, Kering’s revenue will decrease by 0.9%, with Gucci recording a -8%.
Quick recovery only for a few
Flavio Cereda-Parini, analyst at Jefferies, offers a reading of the market: “Dior and Louis Vuitton recovered more quickly when China reopened, because they are leaders in leather goods and have a wealthier and older clientele. Gucci, on the other hand, trusts prêt-à-porter and Millennials”. The debate is open on Gucci. Aubin of Morgan Stanley asks whether the recent weakness of the brand is caused by a “Gucci fatigue”. Alternatively, Morgan Stanley hypothesizes that the weaknesses are caused by the fashion system, which is moving from a baroque style toward a more classical and minimalist style.
Regions
With regards to regions, Europe remains the most challenging. The lack of tourists in the fourth uarter of 2020 caused a decrease of sales similar to the one before. And so? -30%. Positive, but weak, the trend for the United States in regards to luxury, with the segment that will continue to put its faith into Asia in 2021 as well.
In image: Milan, January 2021ù
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