Majors

How the Coronavirus Is Impacting the Jewelry Industry

MajorsFeb 13, 2020

How the Coronavirus Is Impacting the Jewelry Industry

Pandora, LVMH and Kering execs reflect on the ripple effects of the outbreak as sales continue to dip.

20200213_Chow_Tai_Fook_Store.jpg
A Chow Tai Fook store in China (Image courtesy of Wikimedia Commons/Wpcpey)

New York—Global health officials estimate the coronavirus outbreak is responsible for 1,300 deaths worldwide as of Thursday, and its effects are rippling through the global economy.

The current outbreak originated in the Wuhan province of China with symptoms similar to the common cold, like fever and cough, but more severe symptoms can develop, such as severe acute respiratory syndrome and kidney failure.

There are more than 60,000 confirmed cases, which have spread from mainland China to 25 other countries and territories.

As the casualty count rises, areas of China have been on lockdown and additional screening measures are underway in airports worldwide in an attempt to contain the virus.

The disease is impacting industries worldwide, including luxury brands, which depend heavily on Chinese consumers today. Investment group Jefferies estimated Chinese buyers made up about 40 percent of the €281 billion ($306 billion) spent on luxury goods worldwide in 2019 and drove 80 percent of the growth, as per a report from the Financial Times.

Here’s how the outbreak, which started at the end of December, has affected the luxury industry so far.

Trade Shows
In an effort to contain the outbreak, jewelry trade show organizers are moving and canceling shows, and taking extra precautions for those events scheduled to go on as planned.

The Hong Kong International Diamond, Gem & Pearl show and the Hong Kong International Jewellery Show, both scheduled for March, have been moved to May.

The AEC Gems & Jewelry Presidents’ Summit, which is held by the Hong Kong Jewellery & Jade Manufacturers Associations, has been postponed as well to a soon-to-be-announced date.

Swatch cancelled its “Time to Move” event, scheduled for late February/early March in Zurich, Switzerland, in order to “prevent their partners from travelling internationally in an insecure climate.”

And Alrosa announced last week that it would be relocating its March auction of special-size rough diamonds from Hong Kong to Moscow.

In contrast, the organizers of the upcoming Bangkok trade show will not be changing their plans because of the outbreak.

The 65th Bangkok Gems and Jewelry Fair, scheduled for Feb. 25-29 at the Impact, will go on as scheduled.

In a letter shared with National Jeweler, Somdet Susomboon, director general of Thailand’s Department of International Trade Promotion, outlined what the country is doing, and will do, to ensure visitors’ health and safety during the show.

Precautions include installing thermal scanners and infrared thermometers to identify potentially infected people; spraying disinfectant at the fairgrounds;

providing hand sanitizer at all entrances, toilets and meetings rooms; providing masks; and setting up a coronavirus screening unit.

Outside of the jewelry world, the Formula 1 Chinese Grand Prix in Shanghai and Olympic qualifier events have been postponed as well.

Pandora
Pandora suffered a rough fourth quarter as sales in China showed continued weakness.

In an interview with Reuters, CEO Alexander Lacik said the Danish jeweler has seen an “unprecedented” drop in business in China as a result of the coronavirus.

“As I sit here and watch the Chinese business, it is in a standstill mode; I mean there’s pennies being sold,” he said.

Lacik said 70 of its 240 stores in China have been closed by order of the government and customer traffic at its open stores “is next to none.”

“For Pandora, as well as many retailers with a presence in China and Hong Kong, the outlook for the year depends greatly on how the coronavirus epidemic unfolds and, of course, whether cases start to ramp up in Europe and the U.S. where, up to now, cases have been few,” Nigel Frith, a senior market analyst at AskTraders.com, noted in an email to National Jeweler.

Looking to the year ahead, Pandora expects like-for-like sales to remain in the red with organic growth also decreasing.

LVMH
LVMH ended the year on a strong note, posting double-digit revenue growth even as protests in Hong Kong weighed on the second half of its fiscal year.

The company’s brand portfolio includes Louis Vuitton, Christian Dior, Bulgari and Hublot.

CEO Bernard Arnault addressed the potential impact of the coronavirus on China, a key market across all sectors, in an interview with reporters following the results.

Arnault said Chinese authorities told him the peak of the virus is expected to pass within weeks and the situation is expected to settle down by the end of March.

“If it dies out in two months or two months and a half, it’s not terrible. If it takes two years, that’s a different story,” he said.

LVMH said it is “cautiously confident” about the new year, citing “an uncertain geopolitical context.”

Kering
Kering, the luxury titan behind brands like Gucci and Balenciaga, posted strong results in its quarterly report Wednesday.

The company reported double-digit revenue growth overall in its fourth quarter and full year as well as in its jewelry houses, which include Boucheron and Pomellato.

On an earnings call, CEO François-Henri Pinault said the environment in China had “changed significantly” in the wake of the coronavirus outbreak.

He said about half its stores in the country are closed and those that remain open have seen a slowdown in traffic and shortened operating hours, leading to a “strong drop” in sales.

Events, product launches and store openings have been postponed in the area while inventory is being moved out of the country to other regions.

“Due to the evolving nature of the situation, it is impossible at this time to fully evaluate the impact on our businesses and how fast they will recover,” he said.

Kering did not provide guidance for 2020 but said it “remains confident” in its growth potential.

“The underlying strength of the business bodes well for the second half,” Jefferies analyst Flavio Cereda told the Financial Times, but noted that more information on China is needed.

Gold
Gold jewelry sales in China are expected to sink this year as a result of the coronavirus outbreak.

“People are not in the mood to shop for jewelry,” Zhang Yongtao, chief executive officer of the China Gold Association, said in an interview with Bloomberg.

Yongtao said he expects the sales of gold jewelry and bars to drop substantially this year.

“We have seen in China, particularly over the Lunar New Year, empty streets and deserted shopping malls. Quite simply, people don’t want to be in public spaces unnecessarily for fear of contagion,” noted Frith, the AskTraders.com analyst.

He added that if cases were to emerge in the U.K., whose economy is already fragile due to Brexit uncertainty, a similar slowdown in spending would arise there.

Research firm Metals Focus forecast a 6 percent decline in gold jewelry sales in China this year, but said it would “not be surprised if that projection proves too optimistic.”

The drop in jewelry sales may be particularly sharp as the outbreak has disrupted Chinese New Year, which is usually the busiest period for gold sales.

In addition, a slowing economy and weak growth in disposable income translates to less money for consumers to spend on discretionary items, like jewelry.

The report noted that even before the outbreak, the jewelry industry was facing headwinds, including weak consumer sentiment, a shift to smaller designs, and a sharp rise in gold prices, which could continue.

Investors tend to favor safe-haven assets like gold during periods of uncertainty, so if the outbreak were to develop into a pandemic, it may push up gold prices considerably

From a manufacturing standpoint, the Hong Kong Jewelry Manufacturers’ Association told Bloomberg that operating efficiency at Chinese factories may be around 20 to 30 percent as workers remain at home.

The association expressed concern about orders from mainland China dropping.

“In my 40 years in the jewelry industry, I have never seen the entire Chinese market ground to a halt like now,” said Chairman Benny Do.

Do estimated that retailers’ sales volumes of gold jewelry may decline 70 percent year-over-year in the first quarter.

Health experts recently convened at the World Health Organization’s Geneva headquarters for a two-day forum to strategize on how to stop the coronavirus outbreak and prevent another in the future.

“This outbreak is a test of solidarity—political, financial and scientific. We need to come together to fight a common enemy that does not respect borders, ensure that we have the resources necessary to bring this outbreak to an end and bring our best science to the forefront to find shared answers to shared problems,” WHO Director-General Dr. Tedros Adhanom Ghebreyesus said in a statement.
Lenore Fedowis the senior editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

Hand holding holiday shopping bags
SurveysSep 26, 2025
Online Shopping, Influencers to Drive Holiday Spending, Mastercard Says

Holiday sales growth is expected to slow as consumers grapple with inflation and tariff-related uncertainty.

Austin Shines Jewelry Award
Events & AwardsSep 26, 2025
Winners of Austin Jewelry Design Contest Announced

Jamie Turner Designs is among the winners of the local “Austin Shines” contest, hosted by Eliza Page, a jewelry store in Austin, Texas.

Kwit Square Signet Pinky Ring in Red and Azure
TrendsSep 26, 2025
Piece of the Week: Kwit Jewelry’s Square Signet Pinky Ring

The red and azure colorway is one of many fun enamel pairings offered, bringing whimsy to the classic style of a monogramed signet ring.

reDollar-fine-jewelry-department.jpg
Brought to you by
reDollar.com Is Rolling Out the Next Level Jewelry, Diamond & Watch Consignment Program

With their unmatched services and low fees, reDollar.com is challenging some big names in the online consignment world.

Jewelers of America Fly In
Policies & IssuesSep 25, 2025
JA CEO Provides Tariff Update Following Annual Fly-In

A trade deal with Switzerland seems probable, but reaching an agreement with India remains a challenge, David Bonaparte said.

Weekly QuizSep 25, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Entrance to Jwaneng diamond mine in Botswana
SourcingSep 25, 2025
2 African Countries Aim to Take Stake in De Beers

Botswana’s president said his country wants a controlling share, while Angola envisions multiple countries holding minority stakes.

Kira Jewels Growing Rowing Machines
Lab-GrownSep 25, 2025
Kira Jewels Expands Lab-Grown Diamond Production

The manufacturer is adding 1,400 chemical vapor deposition (CVD) reactors to its growing facility in India.

japac-btyb.png
Brought to you by
Rallying Call for the Jewelry Industry on Tariffs and Other Key Issues

Jewelers of America is leading the charge to protect the industry amidst rising economic threats.

Alex Moss SoHo store
IndependentsSep 25, 2025
Alex Moss’ New Flagship Brings Bold Jewels to SoHo

The jeweler to the stars has worked with Drake, A$AP Rocky, Tyler the Creator, and other celebrities.

Matthew Wilson, Kavin Kulamavalava, and a Elmasolvex VA
WatchesSep 25, 2025
Wilson & Son Jewelers Donates to the Horological Society of New York

The Scarsdale, New York-based jeweler donated a professional-grade watch cleaning machine.

Representatives of India’s Gem and Jewellery Export Promotion Council and Indian government leaders
Policies & IssuesSep 24, 2025
Tariffs Throw Diamond Trade Into Disarray

The 50 percent tariffs on diamonds shipped from India to the U.S. have pushed midstream manufacturers to the edge.

Father’s Day diamond advertisement that ran in India
SourcingSep 24, 2025
De Beers Adopts New Strategies to Drive Natural Diamond Demand in India

De Beers’ refreshed, multipronged approach, which includes generic promotions and retail partnerships, is delivering positive dividends.

Policies & IssuesSep 24, 2025
For Jewelry Manufacturers, Higher Tariffs Create Long-Term Worries

They are trying to balance the need to sustain well-established relationships with the pressure higher tariffs have put on margins.

Guest lecture for people with disabilities at the Jewelex factory
SourcingSep 24, 2025
A Helping Hand: An Effort to Boost Inclusivity in the Industry

Jewelry manufacturer Jewelex has partnered with JOSH, an industry training center, on a program for people with disabilities.

Greenwich St. Jewelers Estate Capsule Campaign
CollectionsSep 24, 2025
Greenwich St. Jewelers Goes Back in Time With First Estate Collection

The collection includes pieces dating back to the Victorian and Art Deco periods as well as mid-century and late 20th-century designs.

Marcus ter Haar
Policies & IssuesSep 24, 2025
Diamonds Do Good Names Marcus ter Haar as President-Elect

He previously served as co-chair of the nonprofit’s beneficiary committee.

Jane Goodall Brilliant Earth campaign
CollectionsSep 24, 2025
Brilliant Earth’s New Jane Goodall Collection Calls for Peace

Its second collaboration with the conservationist features jewelry with dove and olive branch motifs.

SRK Kriam Pharma
SourcingSep 24, 2025
SRK Launches Kriam Pharma

The diamond manufacturer’s new company will provide accessible and affordable high-quality medicines across India.

Emmanuel Raheb, CEO of Smart Age Solutions and National Jeweler columnist
ColumnistsSep 23, 2025
Quiet Luxury: What Fall’s Top Trend Means for Jewelers

Emmanuel Raheb shares tips on how a jeweler’s showcases, marketing, and social media presence can whisper, instead of shout.

Super Smalls Super Book of Gems, Maria Dueñas Jacobs, and Bianca Gottesman
SourcingSep 23, 2025
Super Smalls’ New Book Introduces Kids to Gems, Fine Jewelry

The “Super Book of Gems” dives into the Mohs Hardness Scale, the Four C’s, and designs from jewelers like Cartier and Bulgari.

Monique Lhuillier fashion jewelry Kay
CollectionsSep 23, 2025
Monique Lhuillier Adds Fashion Jewelry to Kay Jewelers Line

The new lab-grown diamond jewelry offering is the latest expansion of the designer’s “Bliss” collection.

Rio Tinto tender
SourcingSep 22, 2025
Rio Tinto Announces Final ‘Beyond Rare’ Tender

The miner is honoring the end of an era with an offering of 52 lots from the now-closed Argyle and the soon-to-close Diavik mines.

Vibhor and Alor logos
MajorsSep 22, 2025
Jewelry Manufacturer Vibhor Acquires Alor

The California-based fine jewelry brand will retain its identity post-acquisition, with new collections launching next year.

Gurhan Crown Gold Aquamarine Peacock
CollectionsSep 22, 2025
Gurhan's Collection is an 'Untamed' Zoo

The “Untamed” collection centers on carved gemstone jewelry depicting a range of animals embodying one of the four elemental forces.

Community for Ethical Jewelry logo
Policies & IssuesSep 22, 2025
Ethical Metalsmiths Has a New Name

Founded in 2004, the organization is now called the Community for Ethical Jewelry.

Madison Keys
EditorsSep 19, 2025
These Female Athletes Had the Best Jewelry of the Summer

From Coco Gauff’s hoops to Madison Keys’ diamond medallion, these are Senior Editor Lenore Fedow’s standout jewelry looks of the season.

Vanessa Fernández Studio Curva Wrap Hoops
CollectionsSep 19, 2025
Piece of the Week: Vanessa Fernández Studio’s ‘Curva’ Wrap Hoops

The trendy earrings feature asymmetrical drops, one with a grossular garnet and the other with a diamond.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy