The COVID-19 global pandemic is affecting all 7.8 billion of us in similar and unique ways. We are reeling from rising COVID-19 related death rates, broken health systems, hunger and starvation, joblessness, lockdowns of varying severity, a shadow pandemic of domestic violence, and this is just the tip of the iceberg. The fashion industry has taken a hard hit. Be it material or spiritual, the supply chain to the ideological basis of its existence every aspect of the industry is being wrung out to dry.
This pandemic is increasingly having a negative impact on the fashion industry specifically, having escalated in the midst of the fall 2020 fashion month season. This has caused brands and design houses to shutter their doors and postpone upcoming runway shows. Major events, including the Met Gala and the CFDA Awards, have also been postponed indefinitely.
Major retailers and brands are experiencing severe repercussions because of the COVID-19 pandemic, leading many to shutter their doors and manufacturing facilities, furlough their employees and even file for bankruptcy. Here, a list of some of the major companies impacted by the pandemic.
Popular apparel brand Zara’s Spanish owners Inditex has shut down 3,785 stores pandemic worldwide amid the COVID-19 outbreak.
It was warned by Inditex that its operations have faced a ‘very significant impact’ due to the pandemic, also forced to shut down in 39 markets, according to a report by Metro. It said that it is too early to comment on the effect the virus will have in the future, but it is confident of its business model’s strength and flexibility.
10 Corso Como:
Carla Sozzani’s 10 Corso Como store in New York is closing due to the pandemic.
“This has not been an easy decision, but as the coronavirus pandemic continues to accelerate and the future is unclear, circumstances are not allowing 10 Corso Como at the Seaport District to flourish at this stage,” Sozzani said.
The Topshop parent company is cutting paychecks by 50 percent for its senior executives. It has also furloughed a substantial number of its employees unable to work due to the store closures.
Chief executive officer Ian Grabiner is forgoing a salary and benefits until further notice.
Ascena, which operates Lane Bryant, Ann Taylor and Loft, among others, is furloughing its employees, including half of its corporate staff. It will also be cutting executive salaries.
Associated British Foods:
The Primark parent company is slashing executive pay for chief executive officer, George Weston, and finance director, John Mason, who requested their pay be reduced temporarily by 50 percent.
Los Angeles fashion brand Bldwn filed for bankruptcy on March 25 after added financial loss due to the COVID-19 pandemic. It’s said the company is going straight into Chapter 7, a liquidation of assets. The brand has let go of its entire staff, including 33 people in corporate roles and 45 people at its seven stores.
Brooks Brothers filed for bankruptcy on July 8. The company listed both its assets and liabilities as ranging between $500 million and $1 billion.
Chairman and chief executive officer, John D. Idol, Michael Kors, Donatella Versace and chief creative officer of Jimmy Choo, Sandra Choi, have agreed to forgo their salaries for the fiscal 2021 year. The company is also looking into reducing overall salaries at various levels by about 20 percent. Capri is also furloughing 7,000 in-store associates in North America. Its new timeline for the reopening of its stores is closer to June 1.
How clothing brands can recover from the effect of coronavirus effect:-
- Connect with brand loyalists– Look to your most loyal consumers first to jump-start growth. It’s not uncommon for 10 percent of a brand’s consumer base to drive 60 percent of its sales, making activating these VIPs a must-do. These consumers will likely be inundated with other brands’ offers, so you will need to set the bar high to stand out; personalization will be the best way to do that. Tailored promotions, early access to new-product drops or limited editions, and invitations to VIP-only experiences can be effective levers.
- Shape the ‘next normal’: Longer-term strategic actions– CEOs should look beyond epidemiology and sales data to formulate a view on how the COVID-19 pandemic will reshape their ecosystems and how their companies might capture new opportunities. The following longer-term actions deserve management consideration.
- Map a strategic journey to financial resilience- Crises can create new avenues for growth. Companies will have entered the crisis from various positions of strength, so go-forward opportunities will be, to some extent, bound by starting positions. But all companies would do well to take a hard look at the portfolio: Are you playing in the most attractive spaces and channels? Are you set up to execute effectively to capture demand? The crisis is poised to precipitate a massive shakeout, and the players that ask and answer the tough questions will be better positioned to revive their business.
- Anticipate shifts in consumer sentiment and behavior– While no one can predict what the next normal will be like, we expect a strong desire on the part of consumers to resume their pre-crisis habits once conditions allow.