As the coronavirus pandemic spreads, so does its impact the fashion industry. The world has been on tenterhooks for the past few months. Since the World Health Organisation announced the outbreak of Coronavirus (COVID-19) in Hubei Province, China.
COVID-19 has steadily spread across the world since it originated in Wuhan City, in the Hubei Province of China. With roughly 232,537 cases, 67,003 Recovered and 9,718 deaths globally as of March 19, according to the Channel News Asia. Many European nations including France, Spain, Germany and Italy. Which is experiencing the second-highest number of cases globally with over 30,000 cases are on partial or total lockdown to contain the virus. The current situation has been elevated to pandemic status. An industry that has been particularly affected by the spread is the fashion business.
Current Impact of Coronavirus On Fashion and Beuty Indurstry
The Coronavirus impact is increasingly affecting fashion industry specifically, has escalated during the fall 2020 fashion month season. Causing brands and design houses to shutter their doors and postpone upcoming runway shows. Major events, including the Met Gala and the CFDA Awards, have also been postponed indefinitely. Department stores across the globe, including Nordstrom, Neiman Marcus, Macy’s, Selfridges and Saks Fifth Avenue, have closed their doors.
The first quarter of 2020 may prove catastrophic for the fashion industry, particularly in Italy. Where fashion accounts for over $100bn of the country’s economy. The exponential spread of COVID-19 has led to the postponement or cancellation of several fashion shows, trade shows and exhibitions.
Panic was beginning to set in during the February circuit, with Louis Vuitton managing director Antonio Belloni. Seen fist-bumping guests at their show at the Louvre for fear of more intimate contact. Since the epidemic coincided with the tail end of Milan Fashion Week. Causing some runway events to be called off. Reports are now surfacing that the fall 2020 and resort seasons will be detrimentally impacted. With an almost blanket moratorium on luxury labels. Armani, Burberry, Chanel, Gucci, Louis Vuitton, Max Mara, Ralph Lauren and Versace have all thrown in the towel.
Shanghai and Beijing Fashion Weeks were postponed and Tokyo Fashion Week has been wiped from the calendar. Whilst many Chinese brands including Masha Ma, Shiatzy Chen, Uma Wang, Jarel Zhang, Calvin Luo and Maison Mai. Have cancelled their upcoming Paris Fashion Week events.
In terms of day-to-day trading, many companies are facing financial repercussions due to the virus’ effect on production and consumption. With a measurable drop in sales. Most notably Tapestry Inc – the umbrella company which owns Coach, Kate Spade and Stuart Weitzman. Has said earnings could take a hit of between $97m and $124m. Sportswear giant Under Armour has warned its first-quarter revenues could plummet by $60m.
While China production stopped, Turkish clothing Textile& Apparel Manufacturers Faces Orders Shifting On Coronavirus Fallout. China is one of the biggest suppliers to the fashion and beauty industry today. And this temporary paralysis of the manufacturing chain is problematic for luxury retailers.
According to an interview in TIME: Pauline Brown, The former chairman of North America at LVMH, says the luxury market will be hit by Chinese shoppers focusing more on their health than big-ticket purchases: “The Chinese have been the single biggest driver in luxury and fashion in the last 10 years,” says Brown. “They comprise about one-third of all purchases of luxury, but they are more than 70% of the annual growth in luxury consumption. So there has been a disproportionate reliance for quite a few years in that consumer.” Consequently, businesses are no doubt re-assessing their supply chains in a bid to avoid empty shelves.
Amid the crisis, some larger fashion houses are proactively tackling the emergency. With brands such as the Armani Group, Dolce & Gabbana and Bulgari donating sizeable funds to hospitals and medical research universities. Meanwhile, LMVH, Kering and Richemont have donated approximately $4.7m to the Chinese Red Cross to help contain the spread.
But what of the beauty market?
Speaking to WWD. Edoardo Bernardi, general manager of the Estée Lauder Companies in Italy said. “Our retail sales data have been heavily impacted in these first days.” This sentiment is echoed by cosmetics brand Kiko Milano, which is down 30% in sales, according to CEO Cristina Scocchia. Bricks and mortar stores are struggling, particularly in the worse affected areas. With many emporiums and barbershops shutting doors, alongside an understandable decline in customer footfall.
However, both brands have received a sales injection from e-commerce, with online revenue performing well. Indeed it appears Coronavirus may boost online sales of beauty products. However, it will depend on what percentage online sales account for in terms of their impact. On the wider bottom line.
The beauty industry isn’t the only sector to recognise digital’s potential for continued engagement.
Earlier this week it was announced Condé Nast Italy has implemented a smart scheme. To allow free digital download of the current issues of its popular publications. Including access to Vogue, GQ and Wired for the next three months. The decision comes as a gesture of goodwill to its readers who may be confined to lockdown soon. It’s also a particularly smart PR move. As having some quality reading material may be just what the doctor ordered for those in forced isolation.
According to chief executive officer Fedele Usai: “In a moment like this one, in which the priority is the national health. Our mission continues to be the one to inform and entertain, and to do so in the correct way.”
The worst might be still to come for the fashion and beauty industries as Coronavirus looks set to impact the UK, US, France and Germany hard in the coming weeks. Whilst brands may feel helpless in stemming the negative effects of the outbreak, what savvy companies like Condé Nast are showing, is that there may be opportunities to lessen the blow to consumers and nurture loyalty if brands can think outside the box.
With the ongoing Coronavirus crisis that impact fashion industry, fashion brands around the world are doing what they can to help, by either donating or spreading goodwill so we thought we’d share these with you in the spreading a little positivity.
In the UK Fashion Brands
Three Graces London.
Until Wednesday 1st April, Three Graces London will donate 100% of net sales from all products sold on threegraceslondon.com to homeless charity Crisis, to support their efforts to protect the homeless through the Coronavirus outbreak.
Jewellery brand Alighieri is donating 20% of any website orders to Trussel Trust, who are supporting Food Banks around the UK.
Monica Vinader. The jewellery brand is spreading some kindness by giving away 50 of their bestselling Linear Friendship Bracelets in Mink, on Instagram. Whether is to send to a friend to let them know you’re thinking of them, a gift direct to Mum’s door for Mother’s Day, or to keep for yourself as a pick me up. MV is asking people who enter to share something that cheers them to encourage a little extra love in the world right now.
Around the world Fashion Brands
Parisian brand Sézane is donating 10% of all proceeds from its new collection (until Saturday) to the emergency aid fund set up for the foundation of French hospitals.
Prada has donated six intensive care and resuscitation units to three hospitals in Milan: San Raffaele, Sacco and Vittore Buzzi, which is a children’s hospital.
Donatella and her daughter Allegra have donated €200,000 to the intensive care department of San Raffaele hospital in Milan, to help with the overwhelming number of cases. Donatella said in a statement, ‘In times like this, it is important to be united and support however we can to help all those who are in the front lines, fighting every day to save hundreds of lives’.
The group behind many luxury brands such as Louis Vuitton and Givenchy, is mobilising all its facilities in France to create hand sanitiser for health workers.
Has donated €1.25m to hospitals in Italy to help with the outbreak. It has been distributed to three hospitals in Milan and the Spallanzani hospital in Rome, as well as to the Civil Protection Agency, a national body in Italy that deals with emergencies.