Photo: Markus Spiske
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Chinese tourists normally flock to Bond Street, home to some of the most expensive retail space in the world. They gather behind the velvet ropes outside the Gucci store or emerge from the flagship boutiques of Chanel and Louis Vuitton with stuffed shopping bags. Now, the streets are empty. The coronavirus has caused the quarantine of more than 50 million people in China, and travel and visa restrictions to more than 70 countries. Alongside widespread shutdowns of stores and malls in China, it has taken a heavy toll on the global luxury goods sector, long dependent on the spending of Chinese shoppers at home and abroad. Concerns are also growing around the effect on consumer morale. Beyond just the physical barriers to luxury spending, the contamination fears centered on crowded places are unlikely to create the sort of positive emotional and psychological background that make people inclined to shop. Burberry, which derives about two-fifths of its sales from Chinese consumers, has said the effect of the virus is worse than the disruption caused by the Hong Kong protests, which halved sales for the British luxury brand in its last fiscal quarter. Roughly a third of Burberry stores in mainland China have been shut, the company said in a statement, while foot traffic had plunged 80 percent at the stores that remained open, prompting the company to scrap its full-year guidance. Several leading American fashion groups have also cut their profit forecasts this month. Last week, Capri, the owner of Michael Kors, Versace and Jimmy Choo, said it was reducing its sales outlook for the quarter by $100 million after closing 150 of its 225 mainland China stores. And Tapestry, which owns Coach, Kate Spade and Stuart Weitzman, said it was expecting sales to drop as much as $250 million after closing most of its stores across mainland China.
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