A Low-Key Luxury Brand Will Play A Leading Role In The Post Epidemic Era.

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Bank of America said in its report that although the luxury consumption is changing to a more cautious direction as early as the second half of last year, the new crown epidemic will inevitably accelerate the process, for two reasons:

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First of all, luxury consumers will be affected by the environment after the crisis, so they tend to express their tastes and aesthetics in a more cautious way.

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Secondly, in recent years, most of the products of luxury brands are bought by millennial young consumers, whose incomes and savings are low. So in the next few years, their demand may be limited, while the mature consumers who continue to consume more prefer the simple style.

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"We believe that the brand with stronger aesthetic impact has a special attraction in the period of economic expansion, but it is difficult to cope with the deterioration of the macroeconomic situation. In a time of economic depression, self display will not be easily accepted by society, "analysts said.

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The support for the report is Brand Leading Indicator, a bank of America's brand, which tracks the impact of luxury brands on consumers through search queries, social media and network traffic. In recent months, the number of brands with rich color, print and logo has declined in the ranking. For example, Gucci ranked twenty-third in the top twenty-third after 18 consecutive months; Fendi has been ranked third since the beginning of 2019, and currently ranks fourteenth.

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Bank of America believes that minimalist brands such as Brunello Cucinelli, Prada and Herm s can benefit from this trend, which began after the 2009 economic crisis.

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The report said: "with the natural prudent style, we expect that the next series of Brunello Cucinelli will remain attractive, and there will be more consumers buying these products in the future. The transition to minimalism can also provide more opportunities for other categories of products, such as leather goods. " Bank of America rating Brunello Cucinelli and Prada shares as "buy".

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Gucci has contributed 83% of its operating profit for its parent company, so the brand is crucial to the development of the group in the next few years. Bank of America analysts concluded: "we believe that those products with strong visual effects and flagship marks will gradually become less favorable in terms of sales performance, because consumers will choose a more cautious style." Therefore, their rating of Kai Yun group's stock is "reduction".

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