The report says the plunge of travel and tourism in all key markets has triggered "an unprecedented crisis" for companies operating in the luxury goods space. Claudia D'Arpizio, a Bain & Company partner and lead author of the report, said jewelry, watches, cosmetics, clothes, and accessory sales will drop 25% in 1Q20, and continued lockdowns across the world will lead to further declines in 2Q20. Those declines, she noted, could be in excess of 50-60% in the three months ending in June. Her full-year estimate is a contraction between 20-35%. 

"There will be a recovery for the luxury market but the industry will be profoundly transformed," she wrote. "The coronavirus crisis will force the industry to think more creatively and innovate even faster to meet a host of new consumer demands and channel constraints."

The report notes a strong start of the year in all key regions (Mainland China, Europe, America) was eventually derailed by virus-related shutdowns of businesses and lockdowns across the world. The collapse of the travel and tourism industry, due to flight restrictions, amplified the chaos currently experienced by industry players. 

Though online sales "remained resilient," she said, adding that, traditional brick and mortar stores saw rapid declines in sales in many parts of the world. As economies reopen, luxury goods shops will have social distancing in mind: