What’s going on?

• Burberry is feeling so optimistic about the luxury industry that it lifted its sales forecast for Q1/2021.

What does that mean?

• The pandemic is thought to have overwhelmed luxury retailers like Burberry.
• But as China and South Korea is starting to spend lavishly again, Burberry’s expecting sales to be up by nearly 1/3 this quarter YoY.
• Investors responded by sending Burberry’s stock up 8% – back to pre-pandemic levels.

Why should I care?

For markets: Burberry is not the only one

• Other luxury brands (e.g: Prada, Salvatore Ferragamo, and EssilorLuxottica) also brought their own promising news, saying that their sales were all boosted by strong demand from Asian customers last quarter.

The bigger picture: Underlying crystals found in the pandemic

• Analysts at GAM Investments have pointed out that the pandemic’s accelerated 2 previously underlying trends in the luxury industry:
  • The rise of ecommerce: the sector saw a decade’s worth of growth in just 3 months, with online sales doubling from before the outbreak.
  • The power of brand: big names like Louis Vuitton, Dior and Chanel have been winning market share off lesser-known rivals, and likely to continue.

Content source: Finimize (2021) The Online Shoppers’ Republic Of China. Available at: https://www.finimize.com/wp/news/resting-rich-face/ [Accessed on Mar 13, 2021]