The ccorona virus has struck especially hard on luxury brands as many of them depend on china as an significant business source. The virus has affected their company, not only in terms of logistics but also in terms of sales. Burberry has already closed 24 of its 64 stores in china for a temporary duration. The next quarterly financial results for alibaba are projected to represent a major decline due to the coronavirus. And further long-term consequences may be on the horizon. Where their main customer is a regular traveler, brands that do not typically sell or manufacture in china may be affected.
Travel brands, airport retail and tourist destinations could all see an effect as more travel restrictions on who can enter and leave the country are put in place. More than 50 countries around the world, including the us, italy and australia, have restricted travel to and from china. In the long term, more retailers can be expected to spread production, sourcing and manufacturing across countries to avoid future risk
After the virus has subsided, china will likely remain a major player in both manufacturing and consuming fashion. Yet companies are still reconsidering putting all their proverbial eggs in the basket of china because of the trade war between china and the us. The situation can only intensify those sentiments.
