The impact of the coronavirus pandemic on the apparel sector has not been hidden by anyone. Global Data, a leading data, and analytics company has recently predicted that the apparel market will experience a decline of 15.2% this year.
Honor Strachan, Principal Analyst at Global Data, comments: “The 10 worst impacted markets, in terms of value, will represent the vast majority of this total loss with mature regions suffering the hardest – the US will account for more than 40% of all lost spend, which will contribute to more major chains filing for chapter 11 over the next few months.”
As the countries begin to relax the imposed lockdown restrictions and allow apparel retailers to get back on the floor, a wave of revenge buying among customers is expected. However, the intensity of revenge buying remains subjective, depending on the various aspects like the store’s safety measures, customer’s confidence, and most importantly the affordability of the consumer after this huge economic crisis.
Strachan continues: “Some brands across China, for instance, are seeing store sales reach back up to 80-100 percent of pre-COVID-19 trading levels, while apparel retailers in parts of Germany are also experiencing a better bounce back than forecast. However, players in the likes of Hong Kong (which is heavily reliant on tourism spending) are experiencing far tougher trading conditions, and it is too soon to assess the recovery in Italy but we expect it to be long and drawn out – the same will apply to France, the US and the UK.”
Experts believe that even if the retailers experience a sudden surge in demand due to the revenge buying approach and then witness a trading return to 2019 levels, the retailer would not be able to make up for the losses incurred in H1. They further say that the global apparel market would not be able to regain its momentum until 2022 back.