Louis Vuitton owner LVMH has forecast that the coronavirus crisis will take the shine off its finances for some time yet.
Despite some signs of improvement this month, the world’s biggest luxury goods group admitted this morning that the best it can hope for is a “gradual recovery”, after sales were pummelled by lockdowns across Europe and the United States in recent months
“We can only hope at this point for a gradual recovery,” LVMH chairman Bernard Arnault told investors in the firm on an online call this morning.
He said there were some “quite vigorous” signs of recovery in June, however, as virus lockdowns lifted in much of Europe, including major shopping hubs Milan and Paris.
It comes after Chanel, the second biggest player in the luxury sector behind the Louis Vuitton owner, said earlier this month that the industry faced a “difficult” two years.
The pandemic is expected to hit demand for luxury goods hard, with tourism on course to be severely curtailed for some time, and the Chinese market being hampered after having driven substantial growth in recent years.
HSBC subsequently has predicted that luxury goods sales will fall 17 per cent this year, while Bain has forecast a decline of up to 35 per cent.
Analysts think it will take until 2022 or 2023 to return to the €281bn of sales achieved last year.
LVMH’s presentation to shareholders said that it was “impossible to make an accurate assessment of this impact without timeframe for a return to normal”.
Asked whether the crisis had changed LVMH’s view of its $16bn purchase of Tiffany – which has yet to close – managing director Antonio Belloni said only that the US jeweller was an “emblematic brand” which had its place in the company’s portfolio.