The Impact of Corona Virus on the Fashion Industry

The world has been on edge since news of the virus’ outbreak began in late January in Wuhan City in the Hubei Province of China. The virus has quickly spread globally, with cases popping up in roughly 50 countries, including the U.S., the U.K., Italy, Japan, Egypt and Iran, according to the Centers for Disease Control and Prevention.

The coronavirus is increasingly having a negative impact on the fashion industry specifically, especially the fall 2020 fashion month season. Reports of the coronavirus hitting Italy coincided with the end of Milan Fashion Week, leading to the cancellation of a number of runway shows and events.

This was clearly evident when  no longer be hosting a public runway show in Milan for his fall 2020 collection, rather the show was filmed in an empty theater and posted on the brand’s web site and social media platforms. Other luxury brands like Gucci, Chanel, Prada and Burberry also followed suit by postponing their Fashion Shows. In the wake of the pandemic, Nike also shut down half its stores all over China.
 
Retailers all over the globe are dependent on China as a manufacturing behemoth. It is the world largest producer of manufacturing textiles and clothes and a vital part of the global supply chain. With the country in lock down, brands are facing delayed inventory losses regarding their Autumn Winter Collections. These brands range from fashion brands like H&M to high end brands like Tony Burch. Due to the seasonal nature of Fashion, these delayed deliveries may result the brands to go into a discounting spiral to get rid of the merchandise and to make way for the next seasons collection.

Stock prices have already started plummeting. Under Armor Reported a loss of $50-60 million in the first quarter of the year and many brands have recorded similar observations. China accounts for 90% of the luxury goods market and the outbreak has compelled fashion and luxury brands to revise their financial forecasts. The economic cost on retails will be substantial and will be gradually felt over the months. However the bigger question is whether retailers will pull out of China for their manufacturing demands to prevent a situation like this in the future or will china be able to survive this pandemic and regain its footing in the global market.

The economic cost on retails will be substantial and will be gradually felt over the months. However the bigger question is whether retailers will pull out of China for their manufacturing demands to prevent a situation like this in the future or will china be able to survive this pandemic and regain its footing in the global market.