How Will COVID-19 Affect The Fashion Industry?

Hi everyone, welcome back to another blog post. It’s not a great time right now with everything going on surrounding Coronavirus. I hope you’re all staying safe, following government guidelines, not paying attention to the nonsense floating around social media, and not panic buying! I’m going to try to keep this post as short as possible whilst discussing the possible effects of Covid-19 on the fashion industry. Firstly, looking at the high street brands then the online retailers and finally, the independent brands

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The High Street

When anything like this happens people immediately stop all non-essential spending. Money is spent on food and stocking up on provisions, not buying a new dress or shoes. People don’t want to risk infection so they’re not going to visit their high street or shopping centres.

High street brands will take a hit. We’ve already seen Zara close stores (click HERE) which makes financial sense. If you can’t sell stock, you can’t afford to pay wages. You’re going to see some job losses and many will be put on work pauses. As most workers will be on unfair zero hours contracts, they won’t get sick pay.

Bricks and mortar stores are a haven for germs; people constantly trying things on, touching hangers and rails. Just think about all those people using the pin pads – I’ve never seen one of those cleaned ever.

With no one shopping on the high street, car parks will be empty which means local councils won’t be making money from parking tickets. Obviously with this, nearby cafes and restaurants will see a drop in revenue. The high street brands, if they’re clever, will be trying to push their online sales. However, because of uncertainty, many won’t want to spend more on PPC and social campaigns.

The winners will be the supermarkets who are already selling clothing like Sainsbury’s. People will be in there anyway to buy supplies and will have a quick look in the clothing departments if they need something.

What will be very interesting to see is how production and supply chains will be affected. Factories in China are starting to come out of their lockdown but vital manufacturing time has been lost. I’m not sure whether high street brands will be able to push out full summer collections in time. They’re going to have to write off inventory which means burning in most cases. Don’t forget, the travel industry is also taking a hit right now and if no one is booking summer holidays there won’t be any swimwear sales.

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Undoubtedly, we’re going to see a slowdown. When Covid-19 is all over – no idea when that will be – people will be cautious about spending. This is the worst time to launch a fashion start-up so if you’re thinking about it, hang fire.

My predictions are:

1)     More high street brands will go into administration

2)     Most likely there’ll be redundancies both on the shop floor and in head offices

3)     Seasonal collections will be disrupted

4)     Don’t expect huge knockdowns in sales because companies will need the biggest margins to make up for a slump in sales

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The Online Retailers

As I already said, people will cut back on all unnecessary purchases; buying the latest ‘it’ bag is pale in comparison to making sure your have enough food for two weeks in case your family has to self-isolate. As log as distribution isn’t affected, online retailers should be able to shoulder the slow down. As long as UPS, DHL or Parcelforce – whatever couriers they use - continue to run they can fulfil orders.

Fast-fashion online retailers will be alright because their products are cheap but they’re mass-produced in the Far East. Their factories have already seen the most disruption so it should be smooth sailing from now on regarding that.

A huge warning to anyone using the buy now, pay later solutions and those which let you pay in monthly instalments. Check your T&Cs fast. Fashion retailers will be relying on these monthly instalments.

The luxury online retailers like Net-A-Porter should be alright too as their existing customer base will probably have the recourses to continue shopping.

A lot of their brands will manufacture in Europe, especially their leather goods in Italy so it’ll be interesting to see how stock will be affected in a month or so’s time. I wouldn’t be surprised if there’s a price hike. Most of the top ten luxury brands aren’t making as much money as they used to ten years ago which is why they’re all racing to put out make-up lines.

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My predictions are:

1)     If people are going to be buying from Chanel and Louis Vuitton etc it’s going to be online, not in store

2)     A disruption to leather goods manufacturing in Italy and probably sunglasses too as they’re all manufactured by the same two Italian companies.

3)     More fashion weeks will be cancelled. We’ve already seen scaled back shows at London and Paris, and Milan cancelled so more is to come.

As more people work from home the use of social media will increase so designer brands will be sponsoring posts and pushing out more content to drive sales.

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The Independent Brands

It’s a double-edged sword being an independent brand right now. Slowdown is tough for anyone. The only positive for being a small independent is that you won’t have a plethora of staff or giant overheads and hopefully your business isn’t leveraged to its eyeballs. You’re going to have to fight extra hard for online sales. For independents it’ll be a lot easier to work from home and scale back operations. The key will be keeping in contact with your customers. Utilise Instagram stories and think of fun content – even if it’s just a peak inside your home office.


The businesses who can pivot will always make the most out of a bad situation. I know, it’s easier said than done. It’s not a dire situation, so don’t panic. It’s the uncertainty which is the most dangerous.

We don’t know how long Covid-19 will last. It could be two weeks, a month or four months – literally no one knows! My advice to independent brands is to keep as much money in the bank as possible. Probably hang fire on manufacturing in large quantities until consumer confidence has returned.

So, what are my predictions?

1)     Just like the high street, if the slow down is sustained, businesses will collapse

2)     It’s going to be even harder to raise capital if you’re a start-up

3)     Lead times will be disrupted for anyone manufacturing overseas

I hope you enjoyed this post; I know it’s a little different to our usual ones. These are my first thoughts on Covid-19 and its relationship to the fashion industry so keep an eye out for part two.

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It’s business as usual for us; we’ll keep shipping out your orders and take extra precautions. All products are sealed in recycled plastic bags and orders are packaged wearing protective gloves so you don’t need to worry about contamination.

To all of you, whether you run your own business or not, I say keep you chins up, stay light on your feet and stay positive.

TTFN

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