The apparel sector is one of the most heavily impacted by Covid-19, with
fashion firms facing a potential 20 percent drop in brand value, new
research reveals.
According to business valuation consultancy Brand Finance, the brand
value of the world’s 500 biggest companies could fall by up to 1 trillion
US dollars, with the apparel sector one of the worst affected.
“The Covid-19 pandemic is undoubtedly going to hit the apparel sector
hard - Brand Finance has predicted that apparel brands could face up to a
20 percent drop in brand value,” Richard Haigh, managing director at Brand
Finance, said in a statement. “As these brands negotiate store and factory
closures, broken supply chains and a customer base that is facing
unprecedented economic uncertainty, these brands will have to prepare for a
tough and turbulent journey ahead.”
It comes as fashion stores across the world have been forced to close to
mitigate the spread of the novel coronavirus. In the UK, all
‘non-essential’ stores have been closed since 23 March.
The British fashion market is worth approximately 55 billion pounds a
year in sales, with 80 percent coming from physical stores and the
remaining 20 percent from online.
But the pandemic hasn’t only affected physical stores. Many fashion
companies, such as River Island and Moss Bro, have been forced to halt
their online operations over health and safety concerns.
Over the past few days, however, a number of companies including Next,
Quiz and Fenwick have relaunched their online operations after altering
them to meet strict health regulations for their employees.
After reopening its online operations “in a very limited way” on
Tuesday, Next reached its self-imposed daily order limit within less than
two hours.
Other companies like Primark, which has no webstores, have already
experienced huge impacts from the lockdown. In March, the retailer warned
it would lose 650 million pounds a month in sales due to store closures.
Haigh said: ”Despite the havoc that Covid-19 is undoubtedly going to
wreak on the sector in the coming year, agile brands are likely to fare
much better than their inflexible
counterparts. With new consumer behaviour habits likely to be borne out of
the pandemic, brands will look towards greater innovation in their
e-commerce businesses and the potential reassessment of their store
business models.”
Photo credit: Rawpixel.com, Pexels
* This article was originally published here
