Fashion Industry And Measures To Mitigate The Impact Of Covid-19
The global rise of the Covid-19 is continuously impacting the fashion industry. As the Covid-19 pandemic unfurl, so does its impact. The Coronavirus has rapidly spread across the world since it originated in Wuhan City of China, with roughly 1,831,086 cases and 113,008 deaths globally as of April 12. The U.S. now has the highest number of cases worldwide with over 545,934 cases followed by Spain and Italy with 166,019 and 156,363 cases. The virus is having a negative impact on the fashion & clothing industry specifically, having shoot-up in the midst of fashion month season, causing brands and designer houses to shut their doors and postpone upcoming events & shows. Major events, including the Met Gala and the Fashion Week Australia have been cancelled or postponed. Due to epidemic major retailers and brands are experiencing severe consequence, leading many to shut their doors, factories, furlough their employees and even file for bankruptcy. Major fashion /apparel companies that have faced business losses in Q1 2020 in comparison with Q4 2019 are:
Industry and Company wise impact of COVID-19
- The European clothing and textile manufacturer are expecting a fall of more than 50% in sales and production in 2020 amid COVID-19 outbreak
- Tunisia’s textile and garment industry has issued warning of major commercial and humanitarian damage because of production stoppages and order cancellations resulting from the on-going COVID-19 crisis
- Gildan Activewear has announced to temporarily suspend its production at all manufacturing facilities until April amid the Covid-19 pandemic
- A number of apparel and footwear brands and retailers including VF Corp, Nike and Gap Inc, have temporarily closed stores and cutting opening hours as part of efforts to help limit the outbreak of coronavirus (Covid-19)
- Ascena, the operator of brands including Lane Bryant, Ann Taylor and Loft, is furloughing its employees, including half of its corporate staff. It has also announce salary cut in executive salaries
- Los Angeles fashion brand Bldwn filed for bankruptcy has announced go straight into Chapter 7, the liquidation of assets. The brand has also let go of its employees, including 33 staff in corporate roles and 45 people at its 7 stores
- The average market capitalisation of apparel and fashion players dropped almost 35-40% between Jan – Mar, 2020.image
Response by companies to minimize COVID-19 effect
To combat the epidemic the companies are taking various steps including donation, online sales, temporary production of healthcare equipment’s etc., many brands are closing down entirely but keeping their webshops open.
- PVH Corp is trying to the impact from store closure across the world by reducing and redeploying its inventory commitments
- New Look has suspended the payments to its vendors indefinitely as it works to navigate the crisis
- Fashion retailer Zalora expands into food & health essentials, the company is putting its logistics network to more essential use by expanding its product offering into health and food products
- The latest Helsinki fashion week scheduled in July will go completely digital in the wake of the coronavirus pandemic. The organizers have move beyond a physical event in the Finnish capital and had engaged 3-D architects and 3-D designers well before the pandemic arrived on Europe’s doorstep
- LVMH is started the production of antibacterial gel, which has been in high demand and short supply since the start of the pandemic
- A number of fashion houses have stepped up and making donation too. Prada donated 6 ICU to several hospitals across Milan. Donatella Versace donated €200,000 to a hospital in Milan. Giorgio Armani gave a total of €1.25 million to hospitals across Milan. Kering, the conglomerate that owns brands like Gucci, Balenciaga, and Saint Laurent, donated $1 million to the Red Cross Society, China. Dolce & Gabbanna announced to support research that will combat coronavirus at Humanitas University
- GUCCI has provided 1,100,000 surgical masks and 55,000 medical overalls. It has also announced for donating to crowdfunding campaigns that are supporting relief efforts, including the Italian Civil Protection Department and the World Health Organizations’s COVID-19 Solidarity Response Fund
- Ralph Lauren has pledged $10 million to coronavirus relief efforts, the grant will go to the WHO’s COVID-19 Solidarity Response Fund and the Emergency Assistance Foundation.
Conclusion
COVID-19 has made a long-lasting impact on already troubled fashion industry, the companies are focusing on crisis management and contingency planning and eventually shift towards adopting new normal. China’s customer-first, innovation-centred mentality may prove as a model for recovery to some fashion houses but much depends upon how the post-epidemic consumer behaviour unravels.