With the COVID -19 viruse rapidly crawling into the skin of humanity worldwide, the world is in complete chaos. Economy is going down, stock markets are crashing and business shutdowns have led the world to face a blow. Various multinational companies, manufacturing industries are vacant which has resulted in stagnant growth of financial resources.
Amid the crises, apparel brands and retail companies are likely to be severely impacted in the near term as government orders shut down malls, shops etc and initiates lock-down across states to combat the spread of COVID 19.
In this uncertainty, near-term growth may see sharp deceleration given higher concentration of stores in metro and Tier i/II cities and owing to lower footfalls. A report shared by ICICI securities states given higher operating leverage (30-35% of the fixed costs), near term margins may be impacted. Coupled with relatively higher valuation before COVID 19, the stocks are likely to remain under pressure in the near term.
Aditya Birala Fashion & Retail( ABFRL)
The compay has already shut its stores until 31th March 2020. The company has also stopped factory operations in Karnataka, Tamil Nadu and Odisha till 31st March in the line with local guidelines
A brief from the company reads as
” The business of the company has been significantly affected over the past few weeks and will continue to be materially impacted due to the current crisis. The uncertainty around the situation makes it difficult to as the exact impact at this point of time.”
.Future Lifestyle Fashions Limited( FLF)
Most of companies fashion and retail stores including Central, Brand Factory, aLL amogst other exclusive brand outlets are temporally shut down as the advisory issued by the government.
A brief reads as
“ In the view of uncertainty created globally by this pandemic, the business of the company adversely affected by temporarily shut down of stores, de-growth of revenues, drops in footfalls and discretionary spending by the customers. The expected impact of COVID 19 as of now, is hard to ascertain.
Shoppers Stop Limited ( “the company’) has taken several steps to respond the situation including wherein the company operates, the company has closed all its retail stores until March 31, 2020.
Arvind Fashions Limited
The Company had already moved to work from home policies for all its office employees, and has shut all its stores until March 31, 2020.
Due to ongoing uncertainty, the exact impact of COVID 19 is difficult to ascertain at this point of time. The company will continue to assess the situation and consider restoration of store operations an appropriate time.
( The article to be updated shortly.)