A number of the world’s leading strategy and management consulting firms have been predicting tough times ahead for the global luxury goods industry. The COVID-19 fall-out is expected to cost the sector up to $120 billion in revenues, or more than one third of its $350 billion worth as assessed by, Boston Consulting Group, a global leader for fashion and luxury.

Analysis show the extent global luxury brands rely on the Asian/Asia Pacific market. For example, last year, LVMH derived 37 per cent of its €54 billion in revenues from Asia. Other big brands are exposed to the same or greater degree, such as Bottega Veneta with 53 per cent of its revenues coming from in the region, along with Hermès, Gucci, Burberry Ferragamo and Versace.

Any luxury brands turning to alternative consulting firms in the hope of some bright forecasts are in for the same bad news. BCG’s big-league competitor Bain & Company has suggested a potential year-on-year fall of up to 35 percent for luxury sales, with a more moderate model pegging the decline at between 22 and 25 percent – a loss of around $66 billion to $75 billion according to its assessment framework. But there may be some light at the end of the tunnel.

Bain says, the Chinese market already appears to be on its way to recovery, with consumers returning faster than expected to the luxury stores that have now reopened. Broadly, the firm expects that the Asian region bar Japan will bounce back more quickly than, with slower recoveries expected Japan, Europe and the Americas – markets which will feel the extra pinch from an expected decline in Chinese tourists.