Navigating the post-pandemic era: financial sustainability as a key recovery strategy for luxury brands

The Covid-19 pandemic has significantly impacted the way business is conducted, posing new challenges for organizations to achieve sustainable development. The purpose of this study is to identify the key drivers of financial sustainability in the luxury industry that can guide recovery strategies in the post-pandemic era. We collected data from the financial statements of ten major luxury players, for a five-year period (2017-2021). The organizations’ performance was evaluated using 15 financial indicators retrieved from the literature. Then, we employed a dimensionality reduction technique, namely Multiple Factor Analysis (MFA), to identify the four main strategic dimensions capturing the majority of the original variability. Empirical results suggest that the Covid-19 pandemic has most impacted the operational dimension, and financial stability may be essential to offset poor economic and operational performances. This study provides valuable insights for luxury companies to develop recovery strategies in the post-pandemic era and reconcile financial health and operational efficiency to achieve positive economic results and contribute to financial sustainability.