The Impact of Covid-19 on the Fashion Design Industry

Nike, Gap and H&M are temporarily suspending online operations and have closed down their retail outlets in an attempt to curb the spread of the lethal Corona virus.
The Impact of Covid-19 on the Fashion Design Industry

The CoronaVirus pandemic has had sweeping repercussions on all sectors of the economy worldwide. However, the sectors that will be extremely hard hit are the ones that come in the category of non-essential spending. Design Apparel and footwear definitely come in this category. At the Milan Fashion Week this February, Giorgio Armani chose to live-stream his new collection rather than invite visitors – a direct offshoot of the rampant spread of positively tested cases in Italy. Let us look closely at the UK retail sector, since the UK is a country that attracts billions of tourists from across the globe every year; London is known to be the hub of cultural and commercial activity with maximum retail sales in the European region. It is now estimated that the apparel sector in the UK will be the worst hit with a decline in spending by 1/5th or 20.6 % less than the usual spending. Sales of clothing and footwear in the UK alone are expected to decline by GBP 11.1 billion, which is the equivalent of US $ 13.06 billion.

In other words, it is the equivalent of the combined clothing sales of the 3 market leaders – Primark, Marks & Spenser and Next. All 376 Primark stores spread out in 12 countries have been closed until further notice. Primark – owner, ABF (Associated British Foods) stated that this would account for a loss of some US $ 751.5 million of net sales per month. Nike, Gap and H&M are temporarily suspending online operations and have closed down their retail outlets in an attempt to curb the spread of the lethal Corona virus. 

Asia, which is mainly the hub of production for garments and footwear has exhibited a knee jerk reaction and is predicted to go through some devastating consequences in so far as its fashion and design industry is concerned. Manufacturing units that deal with materials, which were up until now being sourced from China, are in a dire situation.

The Indian government has given strict directives saying that the workers cannot be terminated nor should there be a reduction in their wages. The partial lockdown of factories in Bangladesh has had enormous ramifications; the 1000 factories which have been locked down are the source of livelihood to 1.96 million workers, reporting a loss of a business to the tune of US $2.67 billion in cancelled orders from retailers and brands, which have witnessed a rapid plummeting of sales and have more recently closed down stores in the US and across Europe.

The virus has coerced the world’s fashion capital New York to come to an abrupt halt. The US jeans giant Wrangler has extended its store closure until 31 March. In Mexico and Central America, the factories are shutting down on account of retail stores suddenly closing their shutters in response to the primary need of the hour – social distancing. Mexico, which had already lost significantly to the US market in the last decade, has predicted a decline in exports by at least 10 percent as its factories, which include fabric and denim giants with the likes of Kaltex cut down on capacity.

The wedding season in India begins in October and continues till early spring. For many, the wedding season goes right up to April. Everyone who is part of the fashion industry looks forward to this season. All the interconnected chains involved like the fashion designer, craftspeople who do the zardozi and dabka embroidery, the daily wage workers etc know that this is their time of the year to make a neat sum that shall support them for the rest of the year. But the Covid-19 and the measures to curb its spread like social distancing have dampened the spirit and sentiment of the wedding market big time. Manish Malhotra, TarunTahiliani and Sabyasachi have shut operations. India Fashion Week that was scheduled to be held in New Delhi from March 11 to March 15 has been postponed. Valmort Barcelona Bridal Fashion Week has been postponed from April to June, given the gravity of the current crisis. It is unlike anything the world has ever witnessed.

It has been forecast that the pandemic is going to peak in April with most stores remaining closed till the end of May. Non – food spending will start to recover only in June but a more regular pre-Corona outbreak spending in the apparel industry is expected to come about only by October 2020.

What has been experienced by the design industry worldwide, in the last two months, is just the beginning of a ripple effect. The COVID-pandemic will alter the complexion of the supply – production chain dynamics. There is, however, no need to panic – it is estimated that shopping online will replace in store shopping, in a huge way, especially for the big brands and international labels.

But before we even talk about the revival of the fashion industry, we need to commend the willingness of some of the biggest names in fashion in Italy and France to step up to the challenge – brands like LVMH and Coty have steered their production lines to manufacture sanitiser in the form of hydro alcoholic gel along with the production of masks. Chanel has contributed its services by moving to production of  masks and gowns while Armani to make surgical Overalls. Prada is contributing by making facial covers for donation.H&M is working to make personal protective equipment for hospitals in Europe.

These gestures are what make the fashion and design industry problem solvers and come together as one unified global conglomerate ready to wage a war on the pandemic.

The article is written by Dr. Jitin Chadha, Director of Indian Institute of Art and Design

 

 
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