Fashion And Luxury Retail’s Lost Season

By now the devastating impact of the COVID-19 outbreak on retail is becoming well known. March retail sales fell a record 8.7% and it seems a virtual certainty that the April numbers will be far worse given that the wide-spread shuttering of “non-essential” brick & mortar operations across the United States did not take hold until mid-month. Unpacking these results reveals a wide-range of outcomes. Stocking up efforts, along with people eating at home more, drove a surge in spending at grocery stores and pharmacies. At the other end of the spectrum, department store sales (with a large concentration of fashion-related offerings) fell some 25% and apparel and accessory store revenues cratered 52%. It’s perhaps quite the understatement to say that such a massive deceleration could not have come at a worse time. Apparel specialty players and moderate department stores have been facing significant headwinds for years and many came into the pandemic with weak balance sheets and what might be charitably considered shaky liquidity positions. Moreover, for the luxury segment in particular, March and April are the peak months for full-price selling, making them disproportionately critical to profitability and cash flow. Read more at Forbes.