COVID-19 and Luxury Brands

Luxury brands, as all organizations, are facing serious negative impacts from the spread of COVID-19. Some consulting firms have predicted a €30- €40 billion loss in sales this year for the luxury industry. LVMH CEO Bernard Arnault lost $7.7 billion over the course of a day. Challenges for luxury brands include an inability to serve consumers nationally and internationally, a lack of producing goods and dealing with employees when factories and stores are closing.

Despite any setbacks the company is facing, LVMH has made local and international contributions in combatting the pandemic. The company has donated $2.2 million to the Red Cross Society of China and announced that its perfume and cosmetics factories will be used for the production of alcohol-based sanitizers. The sanitizer will be given at no charge to French healthcare authorities to increase the population that will be able to take proper precautions in protecting themselves against the spread of COVID-19.

LVMH is serving two major publics: the French population and their own employees. The immediate internal challenge is how employees' jobs may be impacted or how they can earn money when regular company movement has been stalled for an indefinite period. On a brighter note, the beauty retailer Sephora is owned by LVMH and has said all store employees will continue to receive base pay for their shifts despite the closing of all North American stores. Large, developed companies can be expected to donate funding and efforts throughout a crisis, the power of LVMH puts them in a place to serve publics beyond just their consumers and aid the overall local French population. I believe it is equally important to prioritize both publics and LVMH is handling this quite well with their relief efforts that stretch internationally.

There are two important public relations lessons to consider with LVMH's efforts for COVID-19:

Prioritize the safety of your publics during a crisis - It is important to follow safety guidelines during any crisis, but especially one that deals with public health and can be a matter of life or death. LVMH is taking proper action in closing stores out of concern for the safety of employees and consumers. It is important the brand follows suit to guidelines in place for social distancing, especially as they are the largest luxury brand and are likely influential to the action of other fashion companies. 

If you have the right resources, help however you can during a crisis - Crisis management moves to a new level during a global pandemic, as the world’s largest luxury company, LVMH is making a significant local impact by producing hand sanitizer in response to the product’s shortage in France. They have committed indefinitely to this production in unison with French health authorities to help a greater number of people protect themselves against the spread of the virus. Although France's entire population may not be the company’s regular consumers, they are using their resources to aid in the most efficient way possible.

The world is an uncertain and scary place right now, but I am thankful I have courses at UNC that allow me to address and explore the positive impact companies such as LVMH are making.