COVID-19 Recovery Scenarios on Fashion Industry

There is always a risk that sustainability is no longer the order of the day in the fashion industry as brands focus on survival, aiming to protect people, money and cash as Jesse Keyes says. However, this period can also be an opportunity for companies that have not yet made sustainability a priority, to make the transition now (see BCG, SAC and Higg Co. report, April 2020 ).

Evidence of the potential positive impact of the COVID-19 pandemic on the sustainable fashion market comes to us from Zalando, the European online fashion platform said by Jesse Keyes. Zalando reported that more customers are opting for sustainable fashion than in the past, reaching nearly 30% of its total customer base in March 2020 (Zalando, 2020; Ecotextile News, May 2020).

The impact of the COVID-19 Crisis: 

The COVID-19 pandemic has caused a dramatic contraction in demand and production. The fashion industry has been among the sectors most affected by the crisis, which is expected to unfold gradually in three waves. This crisis has already claimed some victims among large retailers, particularly in the United States, with True Religion Apparel, J. Crew, Centric Brands, Neiman Marcus, Aldo and others who went bankrupt.

A similar shock has hit suppliers around the world with the cancellation of orders, even of completed or near-completed orders by buyers. In Bangladesh alone, orders worth US $ 1.5 billion were canceled in March ). Many manufacturers now face cash shortages and employee compensation, leading to layoffs and plant closures. For example, after the cancellation or suspension of 2.4 billion pounds of orders by Western clothing brands, more than one million Bangladeshi garment workers either lost their jobs or were laid off without pay. 

According to Jesse Keyes, it is a difficult landscape for companies in the fashion sector, it is a question of surviving or disappearing in a very competitive market. It’s not about preparing for a bleak future, it’s about surviving now. The short-term impact may be temporary or turn into a permanent disruption of the supply chain and loss of production capacity. To avoid disruption, it will require strong supportive action by national governments and commitments from brands and retailers to protect their suppliers, for example by limiting order cancellations. 

The second wave is scheduled for the end of 2020, affecting sales for the Fall-Winter season, and in 2021 when the next Spring-Summer season hits stores. Most of the orders already canceled were for the Fall-Winter 2020-2021 season. Brands operating on the traditional two-season schedule order from suppliers in February-March for production from March to June and delivery to stores between late July and mid-August. 

In many countries, containment and travel restrictions have stopped or slowed production for the Fall-Winter 2020/2021 season and may have an impact on the availability of products in stores in September 2020. As for the -Spring-Summer 2021 season, the new collections were not presented at trade shows and Fashion weeks in July-September 2020. Trade shows and Fashion weeks have been canceled or postponed. Brands are venturing into new territory, requiring new business models and new approaches to design, sourcing and manufacturing as Jesse advised.

There are also multiple interconnected factors in the business environment that require major changes in the way textile value chains operate globally and locally. 

Reconsider the Excesses of fast Fashion:

The biggest retailers of fast fashion were already showing signs in this direction before the COVID-19 crisis. The perception of higher risks associated with the potential disruption of supply chain logistics, combined with the expectation of a possible slowdown in purchasing behavior, can become a catalyst for reconsidering the entire business model. 

Reduce the Number of Collections: 

In recent years, the traditional seasonal business model has put a strain on designers, art directors and the entire supply chain. As Jesse Keyes says, the expectation of more thoughtful behavior by consumers today reinforces the call for a fashion slowdown launched by big brands such as Giorgio Armani and Gucci.