For fashion retailers the Corona virus pandemic had not ben very friendly. Even those with well organized and robust websites sales offers have recently reported very significant decrease in stock turnover. This is well understood, because the most important issue for fashion retailers is of course working capital, but if there is an enormous overhang of inventory, then the problems arrive quickly because the retailers would have to discount heavily in order to sell the stock before it will be out of season.
NEXT, one of the largest UK fashion retailers, observed in the last three months online sales decline by 32%. In order to recapture the working capital they have now plans to re-purpose the stores for June opening in „socially-distanced environment“. Their new measures include sanitation stations, screens and amount of customers to be permited at the same time to enter their shops.
Marks & Spencer are also working toward reopening in June, but Retail Economics analyst Richard Lim proclaimed, that they too will have to discount very heavily in order to shift their stock. They however, didnt close their food department’s stores, thus their knwoledge of the necessary hygene measures is already brilliant. On the top, they have launched already their online „Rainbow Sale“ with up to 50% discounts from which 10% will be redirected toward NHS charities.
Other online stores like GAP, Fat Face, BOOHOO, JD Sports, French Connection are offering similar 50% online discounts.
Boohoo Group placed in May over 58 mln shares in the market and raised within 24 hrs net profit of over 197 mln pounds. Their online profits soared up till end of February, but now have been mixed and much lower despite their offers of 60% discounts.
Under Amour, the sportswear retailer, reported 23% decline in revenues in the first quarter, wherever Superdry revenue dropped 19.1%.
The menswear retailer Moss Bros reopened their online operations on 13 May, after they had to close it on 26 of March.
More information on Swedish fashion and cosmetics can be found here: https://www.fashionmode.se
In USA the situation for fashion retailers and online stores the situation is not much better, if not worst.
Due yo the situation caused by Covid-19 pandemic, JC Penney, for example, has filed for Chapter 11 bankruptcy protection plan. This has been followed by Neiman Marcus (department store) and retailer J Crew (casualwear retailer).
& Other Stories and Bonprix offers not only huge discounts but also other solutions for their online shoppers. The Customers can now have a support in a form of temporary payments freeze or reduction in repayments for up to three months. The returning policy has been extended to 60 days and, most important, the deliveries are now contactless.
Oasis and Warehouse Group have closed their website and all stores after they failed to find a buyer. Due to extraordinary challenges of Covid-19 pandemic they have not been able to rescue any part of the business.
Adidas Group has already warned that due to global roronavirus lockdown its second quarter sales will be significantly influenced. The previewed drop may be even as low as 40% . Their revenues decreased in the first quarter by 19%. The Reebok branch sales droped by 12%, while Adidas branch sells were down by 20%.
All over, even the healthy companies could not withstand the impact of the pandemic and the only one good thing that comes out of the pandemic crisis for the customers are heavy discounts.