In every large city there is an area which caters to luxury items for sale – many years ago when people traveled by horse and buggy, the more expensive form was called carriage, thus the carriage trade. In New York you can think about 5th Avenue, Los Angeles Rodeo Drive, Chicago – The Magnificent Mile,etc. however the mecca is still Milan’s Galleria Vittoria Emanuele II which besides the shops is a beautiful building.
The clothes and fashion items set the standards for the rest of the world. The world’s wealthiest could go to their store in the big city, but they they go to Europe to see the brands first hand. In an article by Silvia Alosisi of Reuters, the absence of big spending travellers from China, the Middle East and the US is a drag on sales – depending on the brand they buy between 35 and 55% of the expected sales. It is doubtful local wealthy people will make up for the sales.
In Europe, there has not been a rush to high end stores, unlike in China and South Korea where stores reopening have posted double digit sales growth, even though some brands increased prices.
Bain and Co expects global sales of high-end (priced) clothing, handbags, jewellery, and cosmetics to fall between 50 and 60% in the second quarter. Given the London stores are not expected to open till June 15, 50% of sales will have vanished.
Linking to dividend paying stocks, in North America we live in a consumer society with fashion or clothes leading consumer spending. The trends come from the high end or carriage trade and filter down to the masses. While on line shopping at Amazon and others is going strong, the going out to the mall or city center to do lunch and shop has changed and sales are down. Will they go back to what it was? maybe? one hopes they go back to some sense of people socializing.
There are more questions than answers, till the next time – to raising questions.