The ongoing crisis may see mergers and acquisitions of many weakened brands

As per a study by Bain consultancy, the luxury goods sector might face a slump of up to 35% due to this pandemic. It is forecasted that the decline will be much steeper than the 2008 crisis. The global luxury sales in the year amounted to $ 303 billion and it is estimated that post the pandemic it will take around three years to again reach this figure.

This crisis caused by the COVID19 is expected to result in a series of mergers and acquisitions of weakened brands by cash rich luxury conglomerates. It will also result in the closure of many single-brand stores around the world. It is expected that post the pandemic the priorities of luxury consumers might change.

The degree of the year-end hit will be based on the rebounds in the local markets and the resuming of domestic tourism.

Analysis

Co-branding can do the miracle for weakened brands to re-gain their strength. This can prevent many un-needed mergers and acquisitions. Co-branding can result in a huge number of engagements from just one tweet or social media post. This will go on to create a win-win situation for both cash rich and struggling brands.