{"id":2381,"date":"2021-06-22T06:40:18","date_gmt":"2021-06-22T04:40:18","guid":{"rendered":"https:\/\/magazine.lineapelle-fair.it\/?p=2381"},"modified":"2021-06-23T17:47:49","modified_gmt":"2021-06-23T15:47:49","slug":"post-covid-recovery-revenge-is-the-key-word","status":"publish","type":"post","link":"https:\/\/magazine.lineapelle-fair.it\/en\/focus-en\/post-covid-recovery-revenge-is-the-key-word\/","title":{"rendered":"Post-Covid recovery: \u201crevenge\u201d is the key word"},"content":{"rendered":"

To stand up and get back to normal again. The fashion system is supposed to tackle post- Covid hard instability: while dealing with it, they must strive to take back the ground they have lost and face the urgency, at times, to explore new development areas<\/strong><\/em><\/p>\n

The key word, which has been spreading, in the last few months, around webinars, analysis and financial statements issued by fashion brands, is revenge<\/strong>. Revenge shopping. Revenge travel. Revenge at all levels and in all sectors. Such revenge sounds more like an \u201cadrenaline revenge\u201d rather than a \u201cmilitary vengeance\u201d after the upsetting crisis caused by Covid outbreak. After all, this is going to be the primary goal: rather than \u201cbringing things back as they used to be before\u201d, they must regain the ground lost by taking on a challenge, that is, to be ready to explore new development areas.<\/p>\n

Revenge is the key word<\/strong><\/h4>\n

The concept of \u201crevenge\u201d may apply to several scenarios: no matter what context we choose, in all of them China <\/strong>is the needle of the scale anyway. Last April, the Jing Daily Krane Shares China Global Luxury<\/strong>\u00a0index reached the highest rate ever: 333.33 points<\/strong>, which is considerably higher than the pre-pandemic peak (249.9 points).<\/p>\n

Such index, designed by JingDaily, can reproduce the overall performance achieved by the luxury industry\u2019s worldwide market and, especially, by China\u2019s business players. Looking at these results, it turns out that Chinese <\/strong>luxury buyers have spent money <\/strong>for their luxury goods shopping as they never did in the past for fashion<\/strong>. Kering have been placing first, in the index ranking, for two straight months. LVMH and Capri Holdings have been competing to take the runner-up and third-best position.<\/p>\n

Focusing our attention on revenge shopping<\/strong>, this is not a coincidence of course. Since they can no longer travel abroad, Chinese tourists have unleashed the whole of their obsessive passion for western luxury in the boutiques placed in their home country. How long will this trend go on?<\/p>\n

Revenge travel: China\u2019s unknown variable<\/strong><\/h4>\n

We cannot answer such question right now. Moody\u2019s <\/strong>strove to provide an answer by carrying out a recent report, according to which the outlook for global retail <\/strong>looks more rewarding. Yet, on the other hand, they also proved extremely prudent while considering revenge travel<\/strong>. In other words, this is the question: when Chinese buyers start travelling again, will planes be fully booked and will they storm luxury boutiques in Paris, London, and Milan? It is a common belief that shopping will certainly benefit from that, though, like we said earlier, Covid pandemic showed Chinese buyers the way to go shopping \u201cin front of the house\u201d. Revenge limits mostly depend on this unknown variable in the end.<\/p>\n

Retail: what is going to possibly happen<\/strong><\/h4>\n

Moody\u2019s financial analysts have depicted a \u201clarge-scale improvement<\/strong>\u201d for the retail industry, throughout 2021, thanks to vaccine campaigns<\/strong>, which have kicked off and gradually become widespread. In fact, the rating agency has revised its outlook for the retail business, which has been upgraded, from stable to positive. According to analysts\u2019 estimates, the industry operating profit will expectedly increase by 10% to 12% throughout the current year. The sectors which were most deeply hit, last year, by the pandemic crisis, apparel among others, are the ones which are more likely to enjoy recovery. \u201cNevertheless, our estimated outlook might slow down again as 2022 comes closer\u201d, pointed out Mickey Chadha, Moody\u2019s vice-president, while speaking to Retail Dive.<\/p>\n

Back to travelling: yes, no, how much and how long?<\/strong><\/h4>\n

According to Fitch Solutions<\/strong>, the revenge travel period is due to go on for six months to one year<\/strong>. In contrast, according to Alipay North-West Europe<\/strong>\u00a0the increase in sales and shopping will go on for many years<\/strong>, driven by the expansion of China\u2019s middle class. In general, analysts agree on the fact that a considerable amount of money allocated for shopping will be spent in China anyway.<\/p>\n

Talking about this issue, Erwan Rambourg<\/strong>,\u00a0HSBC<\/strong>, expects that expenditure will be half split into Chinese shopping abroad and internal shopping, at the beginning; subsequently, home shopping will progressively gain ground. \u201cRecovery will run gradually in several countries \u2013 commented Benjamin Vuchot<\/strong>, Chief Executive Officer of\u00a0DFS Group<\/strong>, while speaking to Business of Fashion<\/a> \u2013. Airlines expect that international flights will be fully booked again in the next 3 to 5 years. As soon as people are free to move around the world again, luxury will be one of the first categories to benefit from that\u201d.<\/p>\n

Quite clearly, such restarting is not going to take place this year in Europe nor in the United States, pointed out Mario Ortelli<\/strong>\u00a0(Ortelli & Co). In his opinion, continental travels are due to \u201cincrease remarkably\u201d in 2022, especially in the Asia-Pacific area, while intercontinental journeys will increase again in 2023.<\/p>\n

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