The luxury fashion industry is still impacted by coronavirus. Although more than 80% of shopping malls and supermarkets have reopened in major Chinese cities (including Beijing, Shanghai and Guangzhou), as reported by Vogue Business, Italy is preparing for the impact that the epidemic will have on its economy and its 60 million inhabitants. On Monday 9 March, Italian Prime Minister Giuseppe Conte announced that the entire country would be quarantined because of the increase in the number of coronavirus cases. Italy is the country most affected by the pandemic outside China, according to CNN.
The luxury goods sector was hit hard by the initial epidemic. In about two weeks, from 17 to 31 January, the MSCI Europe Textiles, Apparel & Luxury Goods Index fell by 23% and almost 54 billion dollars (48.3 billion euros) in market value disappeared. Several consulting firms, including the Boston Consulting Group and Bernstein, had predicted in February that the luxury goods sector could lose 30 to 40 billion euros in sales this year, according to Business Of Fashion.
But that was before the Italian fashion and textile industry - worth $107.9 billion (€96.7 billion) alone, according to the Wall Street Journal (WSJ) - was quarantined.
The northern region of Italy is home to 60% of the country's textile and clothing manufacturers. The northern region of Italy has been under quarantine since Sunday. A situation that has already had an impact on the luxury sector. Indeed, the headquarters of Prada, Armani and Versace are located in Milan, in the north of the country. Similarly, many international brands, such as Louis Vuitton and Stella McCartney, depend on factories located in the northern part of the country to manufacture their clothes.
With the entire country now under quarantine, the brands will not only face a severe blow to production in the north of the country, but also in the south. Since the south has even more leather goods and jewellery manufacturers. However, leather goods are often one of the most successful sectors for a luxury brand, and a popular handbag has the ability to financially stabilize a business.
Today, under total quarantine, Italian factories are worried not only about their production but also about whether they will be able to sell it. According to the Wall Street Journal, foreign buyers from around the world are cancelling orders for Italian textiles and products, which has an impact on the entire clothing supply chain - from the companies that produce the fabrics to those that create the garments and accessories.
This could not have come at a worse time for an industry that has just completed a month of spring/summer collection presentations. Brands now have to worry about whether they will be able to ship and sell the inventory that cost them thousands of dollars to produce - not to mention the often six-figure cost of a runway show during Fashion Week.
Although the spring/summer collections were presented hesitantly during Milan Fashion Week, before the extent of the coronavirus epidemic became better known, the WSJ reports that thousands of buyers, prescribers and journalists have now decided to avoid the capital's catwalks. As a result, many Italian luxury brands have decided to cancel upcoming cruise collections (editor's note: collections that are presented around the world by the brands between May and June), according to Business of Fashion.
Giorgio Armani's cruise fashion show, which was scheduled for April 19-20 in Dubai, has already been moved to October and will no longer include his original cruise collection. Similarly, Versace and Gucci have cancelled the American shows scheduled for May, while Prada has cancelled its May runway show in Tokyo.
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End of fashion month - and start of a two-week self-quarantine period
After attending Milan Fashion Week (February 18-24), many American journalists, influencers, models and buyers were quarantined by their employers after returning to the United States. Hearst Magazines, which publishes Harper's Bazaar, Marie Claire and Elle, sent a memo to its staff stating that anyone who has been in Iran, China, Japan, South Korea or Italy in the past 30 days must work from home for at least two weeks, according to Women's Wear Daily (WWD).
Dow Jones, which publishes the Wall Street Journal, has sent a similar note, asking anyone who has been in Italy since 6 February - or who lives with someone who has been in Italy during that period - to quarantine themselves. Penske Media, owner of WWD, Variety and Rolling Stone, advised employees to stay at home for at least 14 days after their return if they have travelled to an area affected by the coronavirus, while Meredith Corp, owner of InStyle and People, recommended a voluntary two-week quarantine for those returning from Milan. Condé Nast, however, which owns Vogue, Glamour and GQ, did not recommend remote working for its staff.