The COVID-19 epidemic continues to expand with over 2.5 million cases in over 200 countries and over 180,000 deaths at the time of writing. Alongside the unprecedented human cost, the onslaught of the coronavirus globally is changing the way we work. With most national, state and city governments putting self-isolation guidelines in place, remote work is the order of the day with video conferencing service providers like Zoom seeing exponential growth.
Unfortunately, the coronavirus also dictates whether some work at all: notably grounding whole industries such as retail, transportation, travel and food and beverage. Oil prices have plunged into the negative, and roles reversed with buyers being paid by sellers for the overstock.
The challenges facing luxury, design and technology industries are well-documented – Cannes Film Festival, Venice Architectural Biennale and Milan’s Salone Del Mobile are all canceled. Alongside traditional ports, shipyards housing superyachts are feeling the pinch. However, with such challenges come opportunities and different actors across these industries are adjusting and even thriving under the new and, hopefully, temporary normal. We expect the luxury and technology landscape to evolve as a better understanding of the effects of the coronavirus are discovered.
High-End Sporting Events and Sponsors Face a Tough Year
Unsurprisingly, the coronavirus has also upended the sporting calendar, with professional leagues everywhere suspending their activities, including the NBA, European football leagues and Formula 1. Summer sporting events like Wimbledon and the Monaco Grand Prix hope they can recoup their losses through insurance policies.
Luxury sponsors of these events stand to lose in sales terms with a global economic slowdown anticipated. This is only made worse when the star athletes, on whom they depend, can expect a pay cut of up to 70% in some cases.
The heads of the world’s largest polo organizations met in March to make the toughest decision of the season; polo events across the world would be, first, played without fans in attendance and, later, entire seasons and series were simply canceled. Editor-in-Chief of Polo Lifestyles Josh Jakobitz said of the developments, “This is like nothing we’ve ever seen in our lifetimes, but these tough calls were without a doubt the right decision to protect everyone involved: players, grooms, coaches, patrons, organizers and fans”. The May 2020 issue of Polo Lifestyles is the first issue since the publication’s inception in 2017 that no current polo match coverage and review are included within the pages.
Challenges and Opportunities in Super-Yachting
Ports in the western Mediterranean and elsewhere are all but closed with no yachts currently accepted into ports. Superyacht events scheduled for the first half of the year suffered similar fates to the sporting events above, with many canceled, postponed or going virtual. Venice Boat Show and the Superyacht Show in Barcelona are canceled. Regattas, such as the America's Cup World Series and Dubai Boat shows, are canceled. Singapore Yacht Show and Genoa International Boat Show have all been moved to autumn. Palm Beach International Boat Show will go virtual this month on May 14.
According to Monaco-based naval architect, Raymond Kandal Fagarli, the lockdown is a welcome breather for those plying his trade. “It has removed distractions and allows us to spend more time fine-tuning our concepts and basic design”. One group that may find themselves underwater are charter brokers with ongoing travel restrictions meaning demand for superyacht charters will plummet.
“For those who make their living off charters, 2020 will be a year for the loss column as charters are pushed to the end of the season or next year”, said Fagarli. All is not lost for those in the brokerage business, though. Yacht sales have slowed down temporarily as viewings obviously are not possible. This is only a temporary setback for sales brokers, predicts Fagarli. “Most sales brokers only need to sell two yachts a year, and there might be great deals this summer for both client and broker”, he said.
Acceleration of Athleisure
In recent years, consumers have gravitated toward instagrammable experiences rather than buying items. Boutique hotels, restaurants, bars and cruises have been some of the most dynamic components of the luxury sector until recently. When the lockdowns are lifted at a global level, we expect a big resurgence in this trend. But for now, residents must settle for experiencing luxury in the comfort of their homes.
This is in contrast to customers in China who have started blitzing boutiques and malls on revenge shopping sprees, according to Bloomberg. Chinese consumer habits drive the luxury agenda with streetwear-inspired athleisure as the order of the day, making up over a third of the luxury sales and about two-thirds of global growth.
This is now the case in North America and, to a lesser extent, Europe, but according to Brand Strategist Alexander Shapiro, athleisure is a staple and not a trend. Based in Beijing with agency PBB, he told Polo Lifestyles, “The coronavirus has exploded athleisure wear, from Louis Vuitton Cashmere sweatpants to Gucci hoodies. These are status symbols that are appropriate anywhere.”
An insider at Louis Vuitton in New York City assured Polo Lifestyles that sales are fine – holding steady thanks to online retail and the re-emergence of the Chinese luxury market.
Shapiro asserted that enforced lockdowns have not created the athleisure boom but have only accelerated it amongst other new luxurious ways of living. He pointed out that high-ticket fitness items such as Peloton are just the start. Soon one may be able to keep fit in a driverless car or in business class at 30,000 feet. “New luxury means being able in this new normal to do as you normally would in your home life or in transit”, said Shapiro.