Covid-19 Has Decimated the Fashion Industry & Could Spell the End for Hype Product

[Celerity]

The Business of Fashion and McKinsey & Company have released a new update examining the effects of Covid-19 on the $2.5 trillion fashion industry. The findings, as one would expect, make for seriously grim reading, with millions of jobs put at risk.

https://www.highsnobiety.com/p/covid-19-fashion-industry-impact/

The devastating impact of the virus has decimated the industry, leaving fashion businesses exposed or rudderless across the board. Previously planned strategies for 2020 have become redundant, as leaders try to control the fall-out from what is being described in some quarters as “the ultimate Black Swan event.” This impacts everyone, from media planners in Philadelphia to factory workers in Phnom Penh. “Though the duration and ultimate severity of the pandemic remains unknown, it is apparent that the fashion industry is just at the beginning of its struggle,” reads an ominous part of the introduction.

Store closures due to quarantine measures are already having disastrous consequences. If stores remain closed for two months, the report suggests that 80 percent of publicly listed fashion companies in Europe and North America will find themselves in financial distress. It doesn’t window dress what that might entail, stating: “Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months.”




The report predicts that revenues for the global fashion industry (apparel and footwear sectors) will contract by up to 30 percent in 2020 year-on-year, while the personal luxury goods industry (luxury fashion, luxury accessories, luxury watches, luxury jewelry, and high-end beauty), will contract up to 40 percent. As backed up in a Stackline report yesterday, this can be attributed to the discretionary nature of fashion and the fact that wealthy consumers have stopped traveling and shopping.

It then goes on to explain how the interconnectedness of the industry is causing it to suffer. Staff layoffs and wage cuts have become a reality, just as closed stores mean orders have been canceled, leaving garment workers in the developing world out of work. “For workers in low-cost sourcing and fashion-manufacturing hubs, such as Bangladesh, Cambodia, Ethiopia, Honduras, and India, extended periods of unemployment will mean hunger and disease,” reads a particularly stark paragraph.

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[jimfields33]

1. We're not opening anytime soon as democratic governors have said over and over

[Beartracks]

2. Trump's whole "America First" schtick was always utterly bogus.

So many industries are interconnected with supply chains and support services and discretionary income of workers and customers... It's a global economy and we're all in it.

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[customerserviceguy]

3. Good

the whole business thrives on inciting feelings of insecurity in people.

Edited to add: Not good for the poor folks in developing nations, I was just referring to those in the US who exploit their labor.

[2naSalit]

4. +1

The root of many evils.

[customerserviceguy]

5. Thank you. n/t

[Igel]

6. We still need clothes.

Not quite so many, but I'm a jeans-and-t-shirt person when possible, plain-slacks + polo or button-down shirt when required.

"Fashion" is not something I touch. Lapsed into it one day when I wore an old jacket I had from 35 years ago on a chilly day. Apparently denim jackets were a thing again. Don't know what it connoted, it's back to hanging in my closet until I'm sure it's got no meaning again.

[customerserviceguy]

7. Yes, we do

but the fashion industry doesn't make its money off of the reasonably priced stuff that you and I buy routinely. It plays on people's insecurities, trying to get them to emphasize what's on the outside, and not what's on the inside. The use of stick-thin models reinforces the idea that anorexia might be a good thing.

[pecosbob]

8. So someone remind me why globalization is a good thing for human beings?