During one of the recent presidential debates, Joe Biden described US economic recovery as a “K-shaped” pattern, where the gap between the wealthy and the poor grows, mimicking the letter’s form.

Millions have lost their jobs, while the rich are enjoying some extra pocket money after months of dodging recreational expenses like travel and dining out. The luxury goods sector is among the few industries positioned to rebound from its worst period in decades, fueled by the rich and the East. 

For many high-end brands, a rebound in China is making up for a lull in the West. China announced its economy grew 4.9% annually for the quarter that ended in September, with retail spending surpassing pre-pandemic levels. Meanwhile, LVMH reported an increase in fashion and leather goods sales in the third quarter, with Louis Vuitton and Dior to thank. 

Louis Vuitton’s average Alexa Rank, a measure of website popularity, increased by 50% over the last six months, as online shopping became the norm.

Luxury brands’ social media data also reflects luxury’s resilience, as well as an imminent return to the in-store retail experience. YSL’s Facebook ‘Were Here’ count, which measures how many check-ins, mobile device shares, and photo location tags have been created at a business, has risen by 54% over the last six months. Fendi’s ‘Were Here’ count has jumped 75%.

Gucci’s Facebook ‘Talking About’ count has surged 192% since April. Fendi’s mentions are up 121%, Dior’s are up 130%, and Louis Vuitton’s have increased by 146%. Givenchy and Bulgari are in the lead with Facebook mentions up 321% and a whopping 822%, respectively.

It remains to be seen how and if these metrics will translate to long-term success. Among other obstacles, the pandemic has weakened supply chain and production for LVMH, Kering, and other players in fashion and luxury. That said, “valuations for the luxury sector have remained surprisingly resilient, the Financial Times reports. “It currently trades at a 96 per cent premium to MSCI Europe Index…compared to a usual 48 per cent long-term average.”

LVMH’s operating profit declined 68% in the first half of the year, despite cutting spending on store leases and slashing hiring and advertising budgets. Still, the French group has weathered the pandemic better than smaller competitors. Its shares are down 3% this year, while Kering and Richemont have seen 5% and 20% drops.

Last month, LVMH called off its planned merger with Tiffany due to the jeweler’s “dismal” pandemic-era performance. The companies will meet in court at the start of 2021, with Tiffany hoping to make LVMH to go through with the deal. LVMH is staying more than six feet away from anything that could damage its bottom line. 

About the Data:

Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.





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