Going out of fashion?
Many fashion retailers were already in trouble before the lockdown. Now the fashion sector is likely to be one of the hardest hit, and not only in the short term.
Estimates vary, but it is possible that one third of fashion retailers will be lost.
Non essential retail is open for business again, but that does not mean that crowds are returning to shopping centres. People are being cautious.
Local shops, small town High Streets and retail parks are faring better, but fashion retailers are mainly located in shopping centres and city centres.
The recent move to online shopping during lockdown has increased the pace of a trend that was already happening.
The lockdown means that fashion outlets have stocks of highly seasonal clothes, and it is possible that £15bn worth of stock may be written off. Getting rid of as much of this stock through heavy discounting is a possibility, but even if that was done successfully it would put a further strain on the management of the centres themselves, trying to enforce social distancing measures. Large scale discounting would, in any case, raise expectations among customers, and cause the fashion sector more problems in the future.
The seasonal nature of much of the fashion sector has always left retailers vulnerable to spells of unseasonal weather. Customers may find that fashion becomes less seasonal, and are in any case likely to be less driven by impulse in the future. A severe economic downturn is likely, and customers will, quite simply, have less money to spend.
It may be that specialised shops, for example sportswear and casual wear, may be best equipped to weather the storm.
The top end of any market is often well placed to survive an economic downturn, as are the low cost retailers at the bottom end.
Fashion retailers that own their own strong brands (Superdry, George etc) may also be in a better position than shops selling a wide range of brands. The brands themselves may be more able to market their products online than retailers offering a wide variety of brands.
Buying clothes in a shop is an enjoyable experience for customers. The closure of fitting rooms because of coronavirus will change that experience. It may be replaced by a different browsing experience involving family members at home.
