While COVID-19 continues to wreak havoc on thousands of people’s immune systems it is also compromising us economically. All signs are pointing to the fashion community as taking one of the biggest hits.
As spotted on High Snobiety all businesses related to style are hurting. This should be no surprise as the current pandemic has forced a high percentage of retail stores to shut down in order to slow down the spread of the infection. Business of Fashion and McKinsey & Company has released a new report that details the fragile state that the category is in while everything is on hold.
The agency estimates that 80% of the publicly traded fashion brands will be in financial distress if stores stay closed for two months or more. “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.”
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Introducing The Coronavirus Update to The State of Fashion 2020, BoF and McKinsey & Company’s authoritative annual report now in its fifth year, covering the $2.5 trillion industry, based on exclusive interviews with industry executives, a survey of more than 1,400 fashion professionals from the BoF community, and a global McKinsey pulse survey of more than 6,000 consumers. Even before the coronavirus disrupted financial markets, upended supply chains and crushed consumer demand across the global economy, fashion industry leaders were not optimistic about 2020. But this unforeseeable humanitarian and financial crisis has rendered previously planned strategies for this year redundant, leaving fashion businesses exposed or rudderless as their leaders confront a disorientating future and vulnerable workers face hardship and destitution. With this special Coronavirus Update to The State of Fashion 2020, we have taken a stance on what our “new normal” will look like in the aftermath of this black swan event, analysing surveys, data and expert interviews to provide insight for fashion professionals as they embark on the 12- to 18- month period after the dust settles. Learn more and download your free copy of the report on businessoffashion.com [Link in bio]
When it comes to predicting upcoming trends analysts speculate that even hypebeasts will be more cautious on what they cash out for. “Many consumers will be looking for so-called “investment” pieces — minimalist, last-forever items, that feel more responsible given the state of the world.” Job cuts will also become inevitable and cause a domino effect that can lead to additional devastation. “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.”
You can read the report in full here.
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