It’s been a turbulent last 6 months as far as the global retail industry is concerned – all thanks to the menacing spread of coronavirus followed by store closures and prolonged lockdowns.
Amidst all this chaos, what if someone says the retail sector is doing well? Most of us would surely be surprised, but, then that’s true!
In a report by Coresight Research, the retail sales have been growing year-on-year (Y-o-Y) in the US, the UK and Germany although the gains are unevenly distributed.
While the US witnessed a surprising sales growth of 9.2 per cent Y-o-Y in June 2020 (excluding automobiles and gasoline), UK too saw positive growth in sales. Germany’s comeback was no less than extraordinary with 6.8 per cent jump in June (again excluding automobiles).
Here it is imperative to state that the retail sales especially in the US in June shot up understandably due to home-improvement demand – with sales touching nearly 23 per cent Y-o-Y. Even in the UK and Germany, sales for this sector saw growth in double digits.
Notably, non-store retailers too were instrumental in enhancing US sales in June (30.2 per cent Y-o-Y).
So, while retail sales on the whole have been good Y-o-Y, has it been the same story for apparel industry? The answer to this query is NO.
For the apparel industry, it’s been an incessant struggle with several instances of poor quarters, store closures, debts and bankruptcies over the course of last 3 months. Notably, the store-based specialty apparel sector has remained highly negative in June.
The malls in the US, for which clothing sector holds huge significance, have been massively hit by closures of apparel stores and Chapter 11 filings by fashion giants.
J. Crew, JCPenney, Brooks Brothers, RTW Retailwinds, Tailored Brands, Neiman Marcus are just some of the few American apparel biggies that have filed for Chapter 11 and there are many more.
There are many in UK too who have collapsed into administration lately like M&Co, JD-owned Go Outdoors, Debenhams and more.
Though stores have reopened in the US, the UK and Germany, consumers are still wary of going out. That’s a big reason why there’s a surge in demand for home-improvement, while a huge dip in apparels and fashion products – and that is not good news for shopping malls.
The struggle for apparel retailers is expected to continue for some time though lot of American mall owners are now coming forward to help the bankrupt apparel retailers. It will be interesting to see if this happens in the UK as well.