As days pass by, the urgency to get back to business is growing. At one end, there are fashion retailers who have buckled out of business or downsized considerably like Warehouse, UK, Oasis, Cath Kidston, Laura Ashley, John Lewis to name a few, and others who have declared themselves bankrupt like Debenhams, Arcadia Group, JCPenney, Nordstrom, J Crew, but then there are many more who are waiting for the right moment to open stores and get back to business. A reflection of the intent is seen in the increase in enquiries that are currently making the rounds in the industry.
News of Benetton opening its store in Goa, H&M ready for customers in Dubai and Macy’s re-opening in safe zones of the US, besides markets buzzing with customers in China, bring a sense of positivity to the fashion retail scenario which has been in a gloom for the past more than one month. The biggest US mall owner and operator, Simon Property Group, has recently announced that it is getting ready to open malls across nearly a dozen states with all safety measures in place. In Italy, Germany and Austria, non-essential stores including those selling garments have been allowed to reopen with strict social distancing norms.
These store openings as of now may be in small numbers and in COVID-19 free areas, but the fact that the movement has started is a sign that retailers are preparing to resume from where they left. Wall Street predicts that by mid-May, a large number of stores would be opened for business. An interesting addition is medical textiles, which is the new category being explored for export along with other ancillaries. “Opportunity currently is in mask and PPE categories, not under the export ban. I am working closely with an American buyer on a very huge mask enquiry, samples have already gone and hoping to book the orders soon. Another enquiry is on disposable polyethylene gowns, the ones not sterilised, non-surgical, hence no ban, seems the USA needs enormous numbers as 2-3 buyers have come back with same enquiries,” shares Leela Kanuga, Business Development Head, Impulse India.
Consumer engagement with apparel and fashion brands is up at this time, as more consumers find themselves at home, idly scrolling through social media; however, not all the traffic is translating into conversion. A recent report, entitled ‘Effects of the COVID-19 Outbreak on Fashion, Apparel, and Accessory Ecommerce’ tracked the sales record of 271 fashion, apparel and accessories e-commerce retailers from the UK, US, Germany, France and Sweden that use the Nosto platform and found that there was a noticeable reduction in the number of orders and total sales across all countries from around 7 March, with the worst performing day being 20 March. On this date, the overall sales revenue plummeted by 32 per cent and visits by 24 per cent, whilst average order value fell by 6 per cent and conversions by 9 per cent.
Significantly, since then there has been some improvement in the figures, suggesting that online fashion retailers are adapting to the crisis. The report also highlighted that consumers are continuing to browse for fashion products, offering opportunities for retailers if they adopt a strategy that matches people’s current needs.
All put together, the bottom line is that fashion retail is working its way back to action. Could this mean that factories can look forward to fresh orders?
Confirming that some orders are trickling in, Sameer Thapar, MD, Montrose, shares that whatever orders are coming in are mostly from the departmental stores like Walmart, Costco and similar establishments, as they are the ones that are still open with customers walking into them for groceries, and then in turn, are also buying some apparels too. Extending the thought, Aditi Tihara, GM, Joyline Fashions, handling womenswear business for the buying office says that the mid-level fashion specific retailers are suffering, but those into basics are going ahead with product planning and placing the orders where factories are open.
Adding to the discussion on which type of retailers are still in business, Gurminder Matharu, Country Head, Colveta India, says “Our shops in York, in the north of UK are 90 per cent still open and we are doing good online business; therefore, buyers are asking for deliveries, but it’s not fashion but basics. So, we are getting actual orders right now for Bangladesh, and for India we are getting enquires.” She adds that the buyers want to place orders in India also, but as we are under lockdown, we can only support with estimated delivery after the lockdown opens and factories resume work.
Another point that came out strongly from the discussion with various buying professions in the international space is that the movement is for Autumn/Winter and beyond. “Remember when the lockdown happened, products for Spring/Summer were in shipping; however, after couple of months, Fall season sets in and customers are looking for Fall orders right now. So, stores that are planning to open in the next month or so would need Fall merchandise for their stores. For sure, the business volume would not be the same, but still they would need some products on the shelves,” reasons Sameer.
Rakesh Saigal, CEO, Orange Sourcing, rightly says, “The problem right now is too much stock in stores and warehouses but no customers to buy due to lockdown. But again, when stores open in August, there would be no A/W products or not enough relevant products on ship floors.” He further adds that the product that is still selling well is loungewear tracks, which is mostly because people are indoors. Sharing the reality of his buyers, he candidly says, “My buyers are not placing orders, they are all now focused on S/S21!”
Many stores across the Northern Europe are now open, shares Sanjay Thakur, Division Manager – Global Sourcing, Superdry. “These stores are giving people confidence that A/W orders and production can be proceeded with a bit more conviction, hence right now most factories that are opened are working on A/W which were placed earlier but put on hold due to the sudden uncertainty.” He adds that planning for S/S21 is anyways continuing as usual, so product development teams are busy.
Buying offices that are working in the home segment share that though products cannot be shipped out, orders are coming in good quantities. Again, this is attributed to the ‘stay indoors’ phenomena, where people are investing in home products. “Aside from garments, I have not come across anyone who has confirmed any cancellations. At this moment, we are getting orders from our customers that are real orders. Buyers are waiting for us to open, and they are waiting for samples to be sent out. The categories for which we are getting orders are mostly handicrafts and furniture. Also, customers are looking for home textiles but mostly stocks, so that they get something to sell fast at the stores,” avers Sanjeev Jain, MD, TQM Global Buying.
Sanjeev adds that in-home segment in all the major centres – Moradabad, Saharanpur, Jodhpur and Panipat – have confirmed that they are getting good orders, and once the lockdown is lifted, the quantities are expected to rise. “The only question is, will we be able to bring back the labour to the factories who migrated back to their villages during the lockdown,” he ends off on a thoughtful note.