Global Fashion Retail Industry Facing Crisis Due To Covid-19 Pandemic
The situation of acute pneumonia caused by the new virus Corona tends to be complicated, affecting the activities of many fields, especially the global fashion industry. Not only do billions of dollars have been lost, the disease also makes it difficult for fashion brands to run businesses and launch new collections.
After the COVID-19 pandemic broke out in Wuhan in China in early January 2020, according to statistics from the Centers for Disease Control and Prevention, the Corona virus has spread across 80 countries, including the United States, South Korea, Italy, Great Britain, Japan, Egypt and Iran. Socio-economic activities and tourism in many countries face many difficulties. And the global fashion industry is in a similar situation. In the context of the Fall-Winter Fashion Season 2020, when Milan Fashion Week (from February 18 to February 24) was also the time when Corona virus started spreading in Italy. This event caused a series of luxury fashion houses to postpone the show or livestream without the audience attending. Not stopping there, COVID-19 also causes many obstacles for the global luxury fashion industry in the near future.
The postponement of the Cruise 2021 show
The Resort / Cruise Show is the season to launch an important fashion collection of the year, bringing many “lucrative bargains” to the “giants” of the global luxury industry. This event brings together many famous names from around the world such as fashion editors, fashionista and fashionisto, famous artists, influential KOLS, …
Due to the unpredictable outbreak of the Corona virus, many brands had to postpone the Cruise show which took place in May to prepare for disease prevention and to avoid spreading in the community. Gucci brand representative announced the delay of the launch of the Cruise collection in 2021 in San Francisco on May 18, the schedule to launch the Resort collection of the Prada fashion house in Tokyo (Japan) will also be rescheduled. Chanel was forced to postpone the Métiers d’Art show taking place in Beijing (China) in May; Versace and Armani will also postpone the Cruise 2021 show and announce a new schedule for the upcoming grave.
Resort / Cruise 2020 shows have been delayed due to the unpredictable outbreak of the Corona virus.
Fashion companies are closing their stores in China
VF Corporation is home to well-known brands such as Timberlands, The North Face, Kipling, etc., announcing that it will close 60% of its shops and partners in China to protect people from COVID-19. VF Group Chairman Steve Rendle said: “We always put the safety and health of our customers and partners first in China.”
A week ago, Nike announced that it had suspended 50% of its stores in China because of the COVID-19 outbreak. Moreover, it will reduce operating time to less than weekdays in some retail stores to maintain operations. According to John Donahoe, president of Nike Inc, “First, we are always concerned about those affected by the COVID-19 epidemic and we still ensure the health of our customers, employees and partners of the company. Despite the difficulties, Nike’s long-term opportunity to serve Chinese customers with innovative and inspirational products is still very strong.
Nike will close 50% of its total retail store in China to ensure the health of its customers, employees and partners.
Capri Holdings, the owner of Versace, Michael Kors and Jimmy Choo, closed 150 of the 220 retail stores located in China, which could cost the company more than $ 100 million in revenue in the fourth quarter. Previously, the company representative also announced the third quarter result, which ended on December 28, 2019, showing that the company’s total revenue increased by 9.2% ($ 1.57 billion) over the same period last year. However, in the midst of a complicated and current outbreak, President of Capri Holdings said: “We hope that the people of China and the countries affected by the COVID-19 epidemic will overcome the difficult period. We also hope to find a quick way to solve this crisis soon.”
By the end of the third quarter of 2019, Capri Holding brought in tremendous revenue. However, due to the COVID-19 epidemic, the group predicts a loss of about US $ 100 million.
Online shopping is also heavily affected by the disease
In the face of the rapidly spreading COVID-19 epidemic, fashionistas have chosen to buy goods on e-commerce channels so that they do not have to contact the crowded environment, which has become popular recently. However, in a fashion industry report in 2019, only 9% of luxury goods were traded via the internet. It is worth mentioning that China is considered a major consumer of luxury fashion, but it is the largest epidemic in the world, causing the purchasing power of online designer fashion also plummeted.
The epidemic situation has made the business of fashion brands reduced, in which online shopping is also seriously affected.
From LVMH to Tencent, the fashion industry contributed millions of dollars to prevent the COVID-19 epidemic
To alleviate the increase in the number of infections caused by Corona virus globally, many luxury fashion houses and prestigious fashion corporations have contributed millions of dollars to the fund to repel the spread of Corona virus. Specifically, LVMH Group contributed 2.3 million USD to China Red Cross and 1 million USD to Hubei Red Cross from Kering Corporation. In addition, the brand L’Oreal deducted US $ 720,000 to contribute to the Corona repelling fund for the Chinese Red Cross, Swarovski also contributed US $ 430,000; Estee Lauder contributed US $ 290,000 and Shiseido also contributed US $ 140,000 to this fund. Meanwhile, in mainland China, Alibaba Group contributed 144 million USD and Tencent contributed 43.25 million USD for disease prevention and treatment for acute pneumonia caused by Corona virus.
Implementation: Tô Hoàng Bảo