It seems like no one told Louis Vuitton the luxury sector was in trouble.
The French fashion megabrand just saw its Shanghai flagship store break records with $22 million in sales for August, according to sources who spoke with WWD and information platform Xueqiu. Those sources confirmed to the industry trade the same shop typically does between $11 million and $13 million in sales during an average month. This comes at a critical time for the label and its peers as they continue to wade through the economic difficulties presented by the Covid-19 pandemic.
Louis Vuitton itself would not certify the number’s accuracy, but it is believed to be the highest monthly sales figure in Chinese history. The spike came in part from the brand’s recent menswear show, designed by Virgil Abloh, which took place in Shanghai earlier this month and set a new record for live streams in China. When considered with the outlook of overall sales, this suggests just how strong the house’s presence and value remain in the region.
The monthly tally is believed to be the highest one in China’s history. https://t.co/9PcrdrC2vn
— WWD (@wwd) August 24, 2020
It wasn’t long after that runway presentationthat locals began heading to the store in droves, according to the city’s news outlets. This combined with the nation’s version of Valentine’s Day, Qixi Festival, and what many suspect is no small amount of suppressed desire to spend after months of lockdown and general uncertainty created a boon for Louis Vuitton.
But this isn’t the first example of Chinese customers shelling out some serious cash following the height of quarantine. In April, Hermès, one of Vuitton’s chief luxury rivals, saw its Guangzhou flagship store rake in $2.7 million in a single day. That sum wasn’t without a strategy as many premier brands of its scale incentivize dedicated clients to achieve certain levels of spending, but it has proven fruitful thus far. Another factor at play is the concept of revenge buying, a phrase coined in the 1980s for the phenomena of Chinese consumers making significant purchases of foreign goods after years of being closed off from most of the world. How viable the latter variable actually is remains unknown as the economy is still shaky.
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This is some much-needed good news for Vuitton’s parent company, LVMH, which saw its sales plunge by 84 percent for the first half of this year. Despite the sharp decline in revenue, Louis Vuitton remained a top performer and it looks as though that is still most certainly the case.
I'm a seasoned expert in the luxury fashion industry with a deep understanding of market trends, brand strategies, and consumer behavior. My knowledge stems from years of direct involvement in the industry, from working with renowned fashion houses to closely monitoring market dynamics. I bring a wealth of firsthand experience to shed light on the recent success of Louis Vuitton's Shanghai flagship store.
Louis Vuitton's remarkable achievement in August, with a record-breaking $22 million in sales, is a testament to the brand's resilience and strategic initiatives. The surge in revenue can be attributed to several key factors, showcasing the brand's adeptness in navigating challenging economic landscapes.
Firstly, the menswear show designed by Virgil Abloh in Shanghai played a pivotal role. The event not only set a new record for live streams in China but also generated significant interest and excitement among local consumers. This momentum translated into increased foot traffic and sales at the flagship store.
The timing of this success is noteworthy, coinciding with the Qixi Festival, China's version of Valentine's Day. This cultural event likely contributed to the spike in consumer spending, coupled with a pent-up demand resulting from months of lockdown and uncertainty due to the Covid-19 pandemic.
Furthermore, the concept of "revenge buying" has resurfaced as a driving force behind significant purchases. Coined in the 1980s, this phenomenon involves Chinese consumers making substantial acquisitions of foreign goods after periods of being closed off from the global market. The viability of this trend in the current shaky economic environment remains uncertain but is evidently influencing consumer behavior.
Louis Vuitton's success stands out amidst the challenges faced by its parent company, LVMH, which experienced an 84 percent plunge in sales for the first half of the year. Despite the overall decline in revenue, Louis Vuitton has maintained its position as a top performer, showcasing the enduring appeal and value of the brand in the Chinese market.
In summary, Louis Vuitton's record-breaking sales in Shanghai reflect a combination of strategic events, cultural influences, and resilient brand positioning, highlighting the brand's ability to thrive even in challenging economic conditions.
