How has COVID-19 Pandemic affected the fashion retail market?
Story by: Jeremy Cabral
After five months of the COVID-19 pandemic outbreak, tens of thousands of businesses reduced the number of stores, laid off people, closed, and others have been rendered bankrupt. The pandemic has had a major impact on businesses, including the big industrial giants. With government directives to shut down production and events, consumer demand has gradually decreased, leading to loss of revenue. The apparel and fashion industry have been affected even more with outlets closing, decreasing sales, and some companies going bankrupt.
Victoria’s Secret, a giant in the fashion, the industry was declared bankrupt in the UK after the shutdown threatening 800 jobs and closure of 250 stores. Zara SA announced the closure of 1,200 stores which make 16% of their outlets globally. The company, in response to the COVID-19, said, is focusing more on online selling. The pandemic has also had a major blow on La Chappelle which started closing stores in the mid-2019, and by the declaration of shut down, it had withdrawn 4,391 stores.
Brian Chesky, CEO of Airbnb while in an interview said ”It took us 12 years to build Airbnb and took almost just everything in just 4 to 6 weeks” Starbucks announced the plan to close 400 stores in North America with the affected business. Both Chanel and Hermes discontinued their production in response to the effects that pandemic measures brought. Pattek Phillipe and Rolex, which are leading brands put production on hold bringing to a halt the supply of luxurious watches due to the Covid 19.
In a bid to shift resources and enhance Nike capacity, the CEO, John Donahoe communicated of difficult choices that the company had to make regarding planned layoff to the employees in response to the covid 19 outbreak. With local and international flights cancelled and restricted movements, the travel industry has been predicted to lose revenue by 44% of the 2019 performance.
In late March, a national lockdown was announced in India, which has affected the big fashion industry that is famous for wedding and lavish affairs. Most productions were shut indefinitely before the lockdown to save on resources and prepare in response to the Covid 19 outbreak. Many businesses have lost orders due to cancelled and postponed weddings opting to take their sales online. However, the orders are still in decline most customers saying there is a need for in the instore experience when choosing apparel for their wedding day. Even with the lifted ban and slow return to the normal activities, the pandemic has left the Indian fashion industry in a bad place with missed events and lost revenues.
Covid-19 has had an impact on the economy, and many companies are closing with no exception of the big giants in the fashion industry and more so the luxury world. If a company still has business and is in operations, it is a reason to be grateful and continue bringing value. The second half of 2020 will define corporate strength and survival.