Covid-19 Impact: Can Online Clothing Stores Help Retailers? Experts Weigh In
Covid-19 has impacted the global economy. Financial and retail analysts have talked about how this has impacted the clothing industry
The UK Government has asked stores to close down for the foreseeable future. Non-food retailers had hoped that customers would divert spend onto their online channels, said GlobalData. GlobalData reported that Next, the UK's third largest clothing retailer, is closing its distribution centre due to prioritising the safety of its employees. Many retailers will now feel pressured into shutting down their own operations and potential sales may crash to zero.
Hannah Richards, Retail Analyst at GlobalData, commented: “With no revenue, many retailers will have to resort to cancelling stock orders, furloughing staff, making redundancies, or permanently closing stores to reduce costs and protect the long-term survival of the business. Wider effects of coronavirus (COVID-19) have already been felt, with Jack Wills announcing the permanent closure of an additional 17 stores on top of its pre-virus closure plans, and both Arcadia and Urban Outfitters have cancelled all outstanding orders and extended supplier payment terms.”
With this situation comes the challenge of having stock but having no platform to sell it. A portion of stock will be out of season and limited storage capacities will not allow retailers to look into fresh lines.
It is only children's wear that has shown to be resilient as a subcategory of clothing retail. It is based on need rather than trends and buyers will most likely channel their budgets to the limited places that are still operating.
Coronavirus has surpassed 1 million cases and has hit the economy hard and experts say that the world could be heading towards a global recession. Newsweek reported that at the end of the March, 80 per cent of the United States' 6,000 movie theatres were closed. Bollywood had also shut down all shoots by mid-March. Sports leagues and events such as those from NBA, MLB and NHL have been suspended or delayed their seasons. With theme parks, concerts and Broadway shows cancelled, shuttered or suspended as well and tv shows also facing delays, the business is definitely also bearing the brunt of it all.