Fashion retailers have been among the worst hit by the Covid-19 pandemic, with many already on the verge of closure or making significant cuts to their store network and workforce. Making matters worse, a resurgence of Covid-19 and further lockdowns have come as many governments have announced plans to taper off support for businesses still struggling with the initial closures. These trends, compounded by the stress that intermittent reopening and reclosing has on businesses, could lead many more retailers into bankruptcy by the end of the year.
Depending on where you go in the world, different countries have different policies, like for example in NYC retail stores that are open have shorter business hours with shoppers having to wear a mask and clean their hands upon entry.
Governments around the world need to continue to support the fashion business, but instead in many countries the government has decided to cut funding.
CAN FASHION SURVIVE?
In the past few months, stores like JC Penney, Neiman Marcus, Lucky Brand and Brooks Brothers have filed for bankruptcy and many more are anticipated to follow. PVH, the parent company of Tommy Hilfiger and Calvin Klein, has had to shut 5 of its 66 stores in California Gap has temporarily shut 43 of its 76 stores in California. Levi’s CEO Chip Bergh recently said in an interview that closure was “almost a certainty” in some of the most affected regions.
“There is a bankruptcy every week and they are usually apparel merchants or department stores… that will continue,” says Sucharita Kodali, retail analyst.
Financial experts are predicting that we will see a lot of companies beginning to downsize and restructure the businesses. Even when the stores are reopening, and businesses are trying their best to survive, consumers are hesitant to return back to going into physical stores and returning back to ’normal’.
Probably 30 per cent of the shops affected, particularly in the fashion area will close down or would never open again or would go bankrupt by the end of the year.
Many of the designers that are trying to survive and thinking of the second wave of Covid – 19 are getting more and more concerned. “It’s a little difficult to be positive right now,” said an unnamed designer, “I should be thinking more along the lines of what to do next.”
During the first lockdown, we didn’t know what to do because we had never experienced something like this. Now we have experienced it once, we can hopefully better prepare ourselves if it should return.