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Fashion and pandemic, a falling scenario, resumed in 2022 - Lifestyle

2021-03-11T14:46:30.384Z

McKinsey analysis - Bof, new wave and future lockdowns worsen forecasts (ANSA) Fashion and pandemic: left behind a complicated, not to say tragic 2020, what is happening? McKinsey's market analysis relaunched by Business of fashion shows that the second year with Covid-19 could prove just as challenging for the 2020 fashion industry, if not more so in some markets. For a significant recovery, analysts expect to wait until 2022 and there are those who go so far as to hypothes



Fashion and pandemic: left behind a complicated, not to say tragic 2020, what is happening?

McKinsey's market analysis relaunched by Business of fashion shows that the second year with Covid-19 could prove just as challenging for the 2020 fashion industry, if not more so in some markets.

For a significant recovery, analysts expect to wait until 2022 and there are those who go so far as to hypothesize the roaring twenties like those of the last century after the First World War.

Whatever the future holds, one thing is certain: endurance and perseverance will be the key.


A new analysis from March 2021 updates the scenario: even if the picture varies from country to country, the prospect of new and repeated lockdowns near Easter, which this year falls on April 4, could be enough to leave

the retail sector. fashion in Europe in worse condition than last year

.

In general, fashion has been one of the industries most affected by the Covid-19 pandemic: looking at the results for the full year 2020,

European fashion sales have fallen by about 20% compared to 2019 levels.

.

But performance varied widely by market.

Germany and France performed best, down just 16-18% from 2019, while fashion sales in Spain, Italy and some Eastern European countries contracted by a devastating 30%.

In the United States, fashion sales plummeted 23% year-over-year.

China, on the other hand, was quick to pick up momentum, returning to a growth trajectory in August 2020 compared to 2019 levels, with annual results down just 7% year on year. 

But a particularly strong market performance in the summer months in both Europe and the US was a first indication of fashion's resilience, offering a glimmer of hope.

After the sharp drop in demand, shoppers were eager to regain a sense of normalcy with the reopening of stores.

In Germany, Q3 revenues were only around 13% below 2019 levels, with peak weeks actually matching last year's demand in the summer period.

Investments in digital are also bearing fruit.

Ecommerce giant Zalando added 3 million new buyers in the third quarter of 2020 alone, driving 30% year-over-year growth in its gross merchandise value (GMV).

Markets with high e-commerce penetration, including the US and the UK, experienced 45-50% growth in e-commerce in 2020, while more conservative Southern European markets increased up to 25%.

China, where fashion e-commerce already has a market share of more than fifty percent, also continues to grow.


So while 2020 was tough, it provided an opportunity for the fashion industry to test its resilience by engaging consumers and shopping through online channels, while demonstrating its resilience when stores reopen.

But it also painfully exposed the industry's continued reliance on brick-and-mortar retail, a disturbing awareness given the prospects of continued lockdowns and restrictions in 2021.


Here are projections for the rest of 2021 based on the McKinsey Global Institute's macroeconomic forecasts.

Europe: especially down with other lockdowns

The forecasts for 2021 are particularly negative in Europe, where it is conceivable that the loss in sales could fluctuate between 12 and 24 percent compared to 2019. Although heavy restrictions are expected to continue to suppress international travel, the demand for fashion is expected to reach similar levels, perhaps even better, than in 2020 during the summer season.

Ecommerce will continue to perform well, as consumer confidence is expected to remain at least at 2020 levels, if not better, once the blocks are removed.

But another wave of infections and some ongoing restrictions in physical retail are likely to affect Fall / Winter 2021 sales

 United States: improvements planned

The United States is expected to perform significantly better in 2021 than in 2020. Fashion sales will drop between 6 and 16% compared to 2019, but this is still a welcome improvement over 2020. This partial recovery will be largely part driven by the continuous rise of e-commerce, with online fashion sales set to exceed pre-crisis levels by up to 40%.

But while the US has largely avoided new retail lockdowns, health and safety restrictions and limits on the number of people allowed in stores are expected to continue at least until the summer and could extend into the fall.

China: a complete recovery

Life in mainland China has largely returned to normal, so the most pressing question really concerns the future of Chinese tourists, long the most important source of income for the luxury industry in Europe. With a share of that consumption now being repatriated, luxury brands have proven remarkably creative in their efforts to capitalize on the resulting opportunities in the home market by creating attractions for shopping, entertainment and special events. But when will Chinese travelers return to shop in world capitals? An important consideration is China's vaccination strategy: given the relatively low number of cases in China, some observers have argued that China will not distribute the vaccine quickly, meaning Chinese travelers are unlikely to return in significant numbers before 2022. Meanwhile, Chinese luxury consumers are expected to increase their spending at home by up to 50% this year. However, this would only offset half of the lost sales overseas and Hong Kong at most.

Source: ansa

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