Coronavirus’ Threat to The Fashion Industry
As of 14th February, there has been over 63,000 confirmed cases of the Coronavirus and more than 1,3000 deaths. With many Chinese cities on partial, or full lock down, the suspension of airline carries such as BA to/ from China, and the extension of the lunar year celebrations, the fashion industry is starting to worry:
The fashion industry is worth £2tn per year; 80% of the growth market is made up by Chinese consumers. The power of Chinese consumers has grown massively over the decade and now accounts for 38% of the global fashion industry – significantly more therefore, than in 2003 at the breakout of the Sars epidemic, in which the Chinese consumer accounted for only 8% of the industry globally.
So, what is the future looking like for the fashion industry – a global industry which relies so heavily on Chinese consumers and manufacturers?
Experts in the luxury industry have expressed concern, forecasting around 4 months of low trading figures. Profit warnings have been issued fr
om luxury brand leaders such as Versace, Jimmy Choo, Moncler, and Ralph Lauren. Chinese buyers have been missing at London Fashion Week which has taken place over the last few days, and are set to also be absent from Milan’s Fashion week, which is set to commence in the week ahead.
High street retailers are not immune from the outbreak either: retailers such as M&S and H&M who outsource manufacturing to China are also looking at severe delays on stock. Estimations on delivery windows are wildly uncertain, ranging from anywhere between two weeks, and three months. If the latter is the case, retailers could be looking at a build-up of dead stock when it does finally arrive into stores; this is further worsened by the quickly changing seasonal demand of the fashion industry.
Where footfall in bricks and mortar stores are juristically down in China, Singapore and Hong Kong, e-commerce is on the up. According to experts, at times of national uncertainty and anxiety the population’s buying habits increase in order to fight boredom, frustration, and anxiety. A similar boom took place on the online market place following 9/11 in the US, and after the 2005 tube bombings in the UK.
In the UK, London-based fabric and clothing manufacturers have directly benefitted from the uncertainty, voicing the increase in orders made in order for brands to desperately continue manufacturing goods.
With the coronavirus raging therefore, a macabre shadow has been cast upon the high street, and luxury fashion industry alike, with unpredictability being the resounding take away.