There’s a lot going on in the final months leading up to the end of 2020, most notably the race for a pandemic vaccine and, in the U.S., the upcoming presidential election.
In the meantime, business continues in the new normal as some firms seek to close merger deals before year end, while others are looking at how best to capture market share. Below are some of the matters percolating that impact retail and apparel:
LVMH-Tiffany: French conglomerate LVMH Moët Hennessy Louis Vuitton said on Friday that it received approval by the European Commission to proceed on its planned $16 billion acquisition of American jewelry retailer Tiffany & Co. LVMH said it has since “submitted the proposed acquisition of Tiffany for antitrust review, as it has always stated it would do,” noting that eight of the 10 requisite antitrust clearances have already been obtained. LVMH said it expects to receive approval from the European Commission and Taiwan “well before the Nov. 24, 2020 outside date.” The EC and Taiwan are the two remaining authorities that have yet to approve of the planned deal. A dispute arose between the two over whether their deal could be completed within the time frame stated in their acquisition agreement. The dispute resulted in allegations by Tiffany that LVMH was stalling on antitrust proceedings, after LVMH said it was pulling out due to a request by the French foreign ministry to delay the closing of the purchase until Jan. 6, citing the U.S. threat of additional tariffs against French goods.
Consumer sentiment: The University of Michigan’s Consumer Sentiment Index rose to 78.9, the highest reading since March. Both components of the index, current and expectations, improved. “Sentiment remains way-below its pre-virus level, but notably it hasn’t tested the lows visited in the aftermath of the [Great Recession] 2008-crisis,” Tim Quinlan, Wells Fargo Senior Economist, said. He also noted that just 16 percent of consumers, “the smallest proportion since 2015,” expected the economy to worsen over the next year.
Ad campaigns, despite Covid-19: If anyone thought apparel brands would pull back and stay cautious in their spending until the coronavirus leaves town, one brand did exactly the opposite. Workwear brand Dickies partnered with creative agency Sid Lee to produce its first-ever global multimedia ad/marketing campaign called United by Inspiration, United by Dickies, which will run across multi-platforms that include digital, social, connected TV and customer content. The campaign captures the creativity of 10 Makers across six sectors, including furniture making and skateboarding. The Makers are also featured wearing some of Dickies’ iconic items since the 1940, such as its Eisenhower Jacket. The move may seem counterintuitive to some, but is precisely the marketing and branding risk-taking that consultants said brands should have been taking back in 2008’s Great Recession to separate themselves from competitors.
Coronavirus vaccine—whose prediction is more accurate?: As retailers and apparel brands head into the holiday selling season hoping that there’s no second wave of the coronavirus pandemic come fall and winter, there’s been speculation that the virus could linger through the better part of 2021. And on Friday, President Trump said at a White House press briefing that the U.S. will have enough vaccine doses for every American as of April. He added that there will be at least 100 million doses before the end of the year, and probably “much more than that.” Trump’s statement Friday was in contradiction to a forecast by Centers for Disease Control and Prevention director Dr. Robert Redfield, who on Wednesday told the U.S. Senate Appropriations subcommittee on labor, health and human services, education and related agencies that a vaccine wouldn’t be available until “late second quarter, third quarter of 2021.”
U.S. presidential election: The race has narrowed, with Democratic nominee Joe Biden holding a 5.9-point lead over Republican incumbent Trump, slipping from his summer high of a 9-point lead, according to the Real Clear Politics national polling average. Wells Fargo economist Michael Pugliese noted Friday that PredictIt betting markets give Biden a 59 percent chance of winning, while FiveThirtyEight’s model gives him a 76 percent chance. But that data reflects today’s sentiment, and much can still happen over the next several weeks. Key swing states are a factor, and could sway the Electoral College regardless of the popular vote.